BNP Paribas-owned Harewood Solutions has launched a European equity income strategy to its range, offering a fixed income of 6%,paid quarterly, to discretionary fund managers.
The European equities structured product, Harewood Maximum Income fund is aimed at the wealth management market in the UK.
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The strategy targets a 50% reduction in long-term benchmark volatility and drawdown risk. Management of the fund will be undertaken by THEAM, part of BNP Paribas Investment Partners.
The annual management charge for the fund will be 0.75%, with a minimum investment of £100,000.
The product will be sterling hedged, pay dividends quarterly, offer daily liquidity and Sipp eligible. Its initial income portfolio will consist of 49 companies with a weighted dividend yield of 4.6%.
The fund will be hedged to prevent returns being impacted by fluctuations between the pound and the euro and a call overlay strategy will also be implemented to supplement the income.
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By GlobalDataThe fund is listed on the London Stock Exchange and benchmarked against the Stoxx Europe Select Dividend 30 Net Return Eur Index.
Timothy Parker, co-head of Harewood Solutions, said: "The company estimated dividend growth in Europe would be 4.2% year-on-year in 2014 meaning it provided a good source of income.
"European equities are 30% from their all-time highs but the US and UK markets are close to their all-time high levels," Parker added.
Soobong Han, co-head of Harewood Solutions, said: "Our risk reduction process aims to halve drawdown risk and reduce portfolio volatility by a further 8% per annum.
"We believe that European high dividend paying equities currently deliver a higher yield than their US and emerging counterparts and analysts predict significant growth in European dividends in coming years," he added.
