The fund will be managed by The Boston Company Asset Management, a US-based active manager owned by BNYM. It will follow the same strategy as the already established $1bn US domiciled BNY Mellon Income Stock Fund.
The investment team will be led by John Bailer and will focus on stocks that offer “dividend growth, solid fundamentals and attractive valuations” across 30 to 60 US equities in a range of sectors. BNY Mellon said the fund will target a yield 50% greater than the S&P 500 Index.
Fergus McCarthy, head of UK and Ireland intermediary distribution at BNYM IM said: “We continue to see increased demand from clients for income strategies with exposure to more diverse markets than just the UK. Historically investors have not looked to the U.S. equity market for income but given the breadth and size of the market, we are now getting more investors asking us about prospects for investment.”
Lead manager Bailer said: “U.S. corporations are sitting on over $4.3 trillion in cash balances and their cash flow from operating activities is currently at record levels. Coupled with a fundamentally sound U.S. economy there is a strong case for investing in U.S. equity income. We believe this strategy provides a solution for investors looking to de-risk their “safe” holdings and embrace a dividend approach for the road ahead which may include interest rate rises.”
