This derivatives strategy will invest in the same stocks as the £53m Fidelity Global Dividend Fund managed by Dan Roberts who joined the company at the end of 2011 specifically to run the Global Dividend Fund which was subsequently launched on 1 January 2012.
The new proposition will target a yield of around 5% that will come from two different sources: around two-thirds of the total comes from dividend income earned through investments in around 50 financially robust companies (currently 54 in Global Dividend Income). The remaining third consists of the premiums received from selling call options on a carefully selected proportion of the fund’s holdings.
The target yield compares to 3.2% in Roberts’ existing fund.
According to a spokesperson for Fidelity Worldwide Investments, the strategy will be managed very much on a stock-specific basis, with Jehan running the strategy on between 50% and 75% of the stocks in the fund. This will be done on a discretionary basis and the decision on which stocks to run the overlay on will be made by both Jehan and Roberts.
Jehan, who joined Fidelity in 2007, has been running a similar covered call overlay on the Fidelity Enhanced Income Fund since February 2009, a fund based on the holdings in Michael Clark’s £634m Fidelity MoneyBuilder Dividend Fund.
