Sarasin offers global equity fund

Sarasin has launched an International Equity Income fund. The fund, managed by Graham Ashby and Kevin Bennett, invests in global equities with a maximum of 10% in either Britain or emerging markets.

“We are offering investors a way to gain exposure to international equity markets and to diversify overseas, without sacrificing yield,” says Ashby.

“In the longer term, international equity markets have the capability of delivering superior dividend growth. It used to be mainly the UK that concentrated on dividends but now it is a worldwide phenomenon and there is a strong element of catch-up.”

Ashby says the outlook for dividends is good. “We believe corporate profitability is very strong, particularly corporate cash generation,” he says.

The fund will be actively managed, with a tracking error of about 5%. “It invests in good-quality, solid companies,” says Ashby. “They will be household names within their market, like City group, Opap – the Greek lottery company – and Petrobras. It is not excessively risky. It is a good-quality core holding.”

He says the fund will favour large companies “because that is where we think the value is at the moment. Plus the stocks need to be liquid enough.”

There will be 50 stocks in the portfolio and they will be equally weighted.

Ashby adds: “We want it to be a stockpicking fund and having equal weighting helps that. It is a nice discipline for a fund manager to have, and is a simple way of managing money as it helps you to see what is working and what is not.”

He adds: “2% is big enough to make you constantly question whether you are happy with a holding. But it is also small enough to not crucify your performance [if it does not do well].”

The fund will have no geographical restrictions apart from a 10% maximum in either Britain or emerging markets. “It is ex-UK to provide an element of differentiation,” says Ashby. “We are targeting clients who primarily want overseas equity exposure.”

The minimum investment is 1,000 and the annual management charge is 1.5%.