Polar Capital, a London-based fund manager, has rolled out a new European Income fund that invests in mid- to large-cap pan-European stocks.
Managed by Nick Davis, the Polar Capital European Income fund will hold 30-50 mid to large cap pan-European stocks but will not invest in companies with a market capitalization below 1bn.
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The Ucits-compliant fund will target an overall yield of 10% above the MSCI Europe Daily Total Return Net Euro benchmark index.
The fund, which is listed on the Irish Stock Exchange, has an annual management charge of 1.35% for the R, or retail, share class and 0.75% for the institutional share class with a 10% annual relative performance fee.
The portfolio will be divided into three portions including stocks with dividend yields below the index expected to see capital appreciation; classic buy and hold positions and stocks which yield more than the index, but with lower growth.
Davis said: "Our investment approach is driven by two main factors; the first is investors being influenced by what we call short-term noise, such as macro data points, and secondly a general under-appreciation of the impact of compounding.
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By GlobalData"We look to identify investment opportunities which are mispriced, either reflecting excessive short-term pessimism for strong franchises or a failure to price in the duration or reliability of future compounding earnings. We do this by detailed analysis of a company’s use of cash, carrying out due diligence on their business model and financial accounts," he added.
