JP Morgan Asset Management (JPMAM) has launched a new Global Convertibles Income Fund that will target an initial gross dividend yield of 4.5% in its first year through investing across a broad range of sectors.
The newly launched closed-ended vehicle will be run by JPMAM’s Antony Vallee-led convertible bonds team.
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JPMAM said the "equity sensitivity" of convertibles should see the asset class benefit from stock market rallies, while bond protection should act as a safeguard against any setbacks.
According to Vallee, since the global financial crisis, plenty of companies have issued convertibles and UK investors are becoming more familiar with them again.
"As such, we think demand for convertibles as an asset class will increase. This year alone, we have already seen US$26.7 billion of convertibles issued, which at an annualised rate would equate to US$80.2bn, more than was raised in 2012 or 2011."
The lender’s offer for subscription will close on 5 June 2013 with the shares expected to begin trading on 11 June 2013.
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By GlobalDataDividends will be paid half-yearly in the first year, with the intention of moving to quarterly dividend payments thereafter. It carries a management fee of 0.75% per annum on net assets, and the issue price per share will be 100p, with an expected opening net asset value per share of at least 98p. Minimum investment is US$1519.50.
JP Morgan’s head of investment trusts, Simon Crinage, said: "With convertibles performing well in 2012 and continuing to do so into 2013, we feel now is the perfect time to launch this company."
