To be rolled out at the end of June, the Ucits fund has an underlying portfolio of stocks based on the firm’s existing Dublin-listed North American High Dividend Value Equity Fund. This a concentrated portfolio of around 33 stocks managed by Jim Cullen and John Gould, which has raised over $600m since launched in October 2010.
The new fund will write options on between 25% and 40% of the portfolio. It will target an income of 6% to 7% per annum, from a combination of dividends and option premiums, while at the same time offering participation in US equities. It replicates an identical strategy which has been running in the US for two and a half years, raising $160m.
Cullen said he follows a three-tier strategy of P/E discipline, yield discipline and dividend growth. This value-based philosophy aims to generate strong returns and income to investors over the long term with impressive defensive qualities during bear markets.
“With the new fund, income-seekers will benefit from the addition of the covered call option overlay, but our fundamental investment process has not waivered; investors should stay disciplined and invest for the long term – not just react to the day’s headline news,” he said.
“Our research has shown us that a strict value process, combined with the additional discipline brought as a result of the need for income, provides consistent outperformance over decades.”
A sub-fund of Cullen’s existing Dublin-domiciled Ucits Oeic, the new fund will be available in three currencies: sterling hedged, euro hedged and dollar.
