The fund is managed by Roberto Magnatantini and his team and is currently only available to institutional clients, with plans afoot to register it in countries across Europe and Asia for retail investors soon.
It is a new sub-fund of Syz & Co’s Luxembourg-domiciled Ucits IV Sicav – Oyster – and will be available with a share class paying a monthly dividend.
The Oyster Global High Dividend Fund was launched on 17 October and will aim for moderate yields of 2% to 6% from its holdings, with an average of 4%.
Magnatantini, explained: “Our experience, which has been corroborated by various historical studies, shows that very high dividend yields are rarely sustainable and that they are often symptomatic of companies facing operational problems.
“A more balanced approach between dividend and growth also makes it possible to obtain a better-balanced portfolio in terms of sectors, countries and stock market capitalisations, by avoiding the bias usually built into these strategies such as overweighting of public services or telecoms.”
The process of the fund also eliminates companies whose dividend payout ratio is too high or which have cut their dividend too much in previous years, as well as those with inadequate fundamentals.
Through filtering out the companies in the universe combining these criteria the team reduces the number of companies from 60,000 for the global index to around 600, which it can then subject to conventional qualitative analysis.
Syz & Co added that it considered the fund a “winning strategy at a favourable time” because not only have companies offering a high yield significantly outperformed the market in a consistent manner, but also the current pay-out ratio is historically low and likely to go only one direction – up.