Argonaut Capital is planning a European equity income fund for manager Greg Bennett.
The Argonaut European Income Opportunities fund will target a yield above the overall index by investing in higher yielding companies with sustainable dividends.
Bennett, who is deputy manager of the £346m Argonaut European Alpha fund, will be supported by Argonaut’s founder Barry Norris and a team of analysts.
The investment process will be based on analysing balance sheets and looking at corporate earnings trends to source higher dividends while trying to avoid yield traps.
Bennett says: “At a time when more than 60 per cent of outstanding European sovereign and corporate debt is negative yielding, high dividend equities offer a useful, liquid and alternative source of income.”
The model portfolio of the European equity income fund has a gross yield of about 5.7 per cent. Fees for the founder share class will be 0.35 per cent for a limited time, which investors can lock into. The secondary share class, available from launch, will carry a fee of 0.65 per cent.
The fund is subject to FCA approval.