Hargreaves Lansdown is launching a low cost equity income fund, the second addition to its managed equity range that launched last December.
The HL Select UK Income Shares fund, which will pay its estimated 3.9 per cent yield monthly, will have an OCF of 0.6 per cent making it cheaper than 90 per cent of all active funds.
It is also cheaper than 91.4 per cent of products in the IA UK Equity Income sector.
An HL Vantage platform fee of up to 0.45 per cent also applies.
Fund manager Steve Clayton says the level of communication with investors in the £225m HL Select UK Shares fund, which launched in December, has been a “huge hit” with investors.
Rather than just showing the top 10 holdings, Hargreaves will provide investors with information about the entire portfolio, which will include approximately 30 positions.
“With interest on cash bumping along the bottom and inflation climbing, there is an increased focus on generating sustainable income from the equity markets,” Clayton says.
The fund will seek rising income backed by capital gains, Clayton says.
“Companies that grow their dividends usually see their shares appreciate over the long-term too – in this way a rising income can also translate into long-term capital growth.”
The fund will launch on 2 March.