Fidelity expands multi-asset range with income offering

Fidelity is set to expand its multi-asset fund range with the launch of the Multi-Asset Income fund for managers Richard Skelt and Eugene Philalithis.

Fidelity is converting its Retirement Income fund to create the Fidelity Multi-Asset Income fund, which will be brought to market next week.

The fund is targeting a yield between 4%-6% per annum.

Sitting in the newly formed IMA Mixed Investment 0-35% shares sector, Skelt and Philalithis will invest across asset classes including bonds, equities, physical property, REITS and high yield.

At launch it will be overweight corporate bonds, with both managers believing the space offers compelling valuations.

The vehicle will be classified as an interest fund and will hold a minimum of 60% in interest bearing instruments at all times.

Skelt (pictured) is the chairman of Fidelity's Asset Allocation Group, while Philalithis heads up Fidelity's Multi-Manager Income fund.

The fund is the seventh multi-asset product in the range and will sit alongside the group's £559m Multi-Asset Strategic, £339m Multi-Asset Growth and £30m Multi-Asset Defensive funds, run by Trevor Greetham.

Fidelity's other offerings in the space are the low cost Multi-Asset funds, consisting of the Multi-Asset Allocator Defensive, Multi-Asset Allocator Balanced and Multi-Asset Allocator Growth funds

A spokesperson for Fidelity said the launch fills an obvious gap in the group's product range.

"We believe the current market environment is attractive for income investors and we are looking to take advantage of the high yielding assets in the market," they said.

Fidelity last month reduced the annual management charges on its multi-asset range, aligning the fees to 1.25%.

The Fidelity Multi-Asset Income fund wil have an AMC of 1.25% and standard initial charge of 3.5%.