The UK-domiciled OEIC will offer investors access to the UBS Global Equity Income fund, which is a Luxembourg-based SICAV, via a ‘master-feeder’ structure.
The fund will be managed by lead manager Patrick Zimmermann and UBS global head of structured solutions Richard Lloyd. It has a target of 7.2% indicative current equity yield.
UBS describes the fund as a ‘global equity portfolio with defensive, high quality and high income characteristics.’ It will seek to generate income from both dividends and written call options on each stock within the portfolio. Between 60 and 100 positions across the globe will be held by the fund. Foreign currency risk will be hedged in British Pound terms.
The fund will be available on all major retail platforms and sits within the IMA Global Equity Income Sector.
“While many investors are keen to generate enhanced levels of income in a persistently low interest rate environment, they may also consider ways of reducing relative downside risk due to the strength of many equity markets,” Zimmermann said. “The fund offers a solution to address both these requirements and we would expect it to form a core holding for those seeking the dual objectives of an above average income with a degree of reduced drawdown in comparison to broad-based equity markets.”
“By adding a call strategy on the underlying stocks within the portfolio we are able to generate an extra layer of income for investors. This might also provide an additional element of downside protection,” Lloyd added.
