Sarasin in bond offensive
unit trust will have a 70% fixed interest weighting with 20% in equities and 10% in cash
Sarasin has launched a fund seeking both income and capital growth, through holding a combination of bonds, equities and cash.
Sarasin CI Income portfolio is to be structured as a Guernsey-based unit trust and if there is sufficient demand it will be launched as a UK unit trust later in the year.
The portfolio contains mostly investment grade bonds but also a percentage of equities.
The lead manager is Daniel Briggs, who currently manages the group's balanced managed portfolios. He is assisted on the fixed income side by John Godley, a bond fund manager at Sarasin.
The aim is to provide investors with a consistently attractive level of income, estimated in the first year at 4.5%, paid gross, coupled with medium and long-term capital appreciation.
The fund has a minimum exposure to bonds of 60% while equities are limited to a maximum of 35%.
At launch on 22 July, initial weightings for the fund were expected to be 70% fixed interest, 20% equities and 10% cash.
The fixed interest component of the fund will primarily consist of government bonds and high-grade corporate paper.
Stocks for the equity component of the fund will be chosen from the same universe as the EquiSar and GlobalSar funds, however the focus is likely to be on those companies that provide the highest yield, in keeping with the objective of providing income.
The EquiSar and GlobalSar funds have five themes, the most recent of which is 'survival of the fittest' which sets out to identify the competitive advantage of companies with financial strength and credit quality. These themes will be represented in the equity part of the CI income fund.
Ivo Forde, head of marketing at Sarasin, said the fund will be dynamically managed and positioned toward the strongest opportunities in the market place.
'If we think equities are the place to be, then that will be our focus. But we are starting off with a reasonably defensive stance in the portfolio,' he said.
Forde added the fund was launched in response to turbulent equity markets and to provide investors with an alternative to investing in cash.
'We believe there now exists a unique opportunity to combine the high, real yields available from top quality government and corporate bonds with the appreciation potential now evident in global equity markets,' he said.
'By mixing a high proportion of investment grade bonds with a smaller selection of outstanding equities and holding the balance in cash, investors can enjoy a high running yield, a defensive bond strategy and the opportunity for capital appreciation in the medium to long term.'
Minimum investment in the fund is £2,500 or £100 per month.
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