JP Morgan Asset Management is planning to launch the Global Convertibles Income trust, which will allow investors to access convertible securities globally.
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The company will initially target a 4.5% annual dividend and will be managed by the JP Morgan convertible bond team, which will be headed by Antony Vallee.
The investment firm says convertibles offer investors bond-like characteristics in falling equity markets with the potential to participate in rising markets.
The investment company structure allows greater freedom to invest in new issues, and small and mid-cap issues where liquidity constraints restrict the ability of rival open-ended funds to invest. In addition, a closed-ended fund offers investors the potential for predictable, steady income in a low-cost structure.
Vallee said: "This, coupled with the rising trend of established companies around the world turning to convertible bonds as a way of raising cash, means that we believe the time is right for this investment company. This is global equity income for the cautiously optimistic."
