US equity specialist Cullen Capital Management has introduced its second UCITs vehicle in the UK, the Cullen US Enhanced Equity Income fund.
The fund will be based on the $600 million Cullen North American High Dividend Value fund, which was launched in the UK in 2010, according to Investment Week.
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This new fund will invest in the same portfolio of stocks as the Value fund but includes a covered call option overlay on up to 40% of the portfolio in a bid to keep volatility low, Investment Week’s report added.
Manager Jim Cullen hopes the fund will achieve 6%-7% income per annum, but with a volatility level closer to that of a bond fund.
"The search for income continues apace across the globe, and this strategy has been designed for clients seeking alternatives to fixed income – and looking for capital gain potential. With the new fund, income seekers will benefit from the addition of the covered call option overlay," Cullen said.
