Rathbone prepares to launch High Income fund

Rathbone is to launch a High Income fund focusing on UK equities and European property shares.

The initial portfolio will have 65% in FTSE 100 stocks, 30% in property company shares and 5% cash.

Expected to launch in May, subject to approval from the Financial Services Authority, the fund is estimated to yield 3.8-4%, targetting 30% above the FTSE All-Share index.

The fund will be run by a team of managers comprising Julian Chillingworth, Carl Stick and Hugh Yarrow.

Chillingworth, who has 30 years’ investment experience and will be in charge of the portfolio, joined Rathbone five years ago and works on its Income and Growth fund. Stick manages the Rathbone Income fund and is also assisted by Yarrow.

The rationale behind creating the product, says a Rathbone spokesperson, is a perceived gap in high-yield funds and feedback from IFAs saying their clients are looking for a strong income. The focus will be on self invested personal pension and Isa investment.

The High Income fund will apply the same research process adopted by Rathbone’s other funds. There will be a macroeconomic overview, which looks at legislation, geopolitical changes and world events. Based on these factors, decisions will be made as to what elements will benefit, and percentages will be adjusted in relation to forecasts.

The annual management fee for the High Income fund is likely to be 1.5%, with an initial charge of 5.5%. The minimum investment is 1,000.