Swip eyes European dividends with new fund

Scottish Widows Investment Partnership (Swip) plans to launch a European equity income fund within the next three months.

The European Income fund will be managed by Catie Wearmouth, investment director, European equities. It will hold between 30 and 50 stocks and will aim to produce a higher yield than the FTSE Europe excluding UK index.

The open-ended fund will seek to take advantage of the increasing tendency for companies in Europe to pay attractive dividends, according to Tony Maddock, head of retail at Swip.

“Dividends are becoming much more important across continental Europe,” says Maddock. “Continental European companies are becoming more shareholder friendly.

“The average dividend of Europe excluding UK [companies] is nearly 50% higher than 10 years ago. Investors in the UK are well bought into the idea of income-generating funds and are increasingly aware of the need to diversify.”

Wearmouth joined Swip’s European equity team, led by Nigel Bolton, in March 2005. Before this she worked for Kempen Capital Management, a Dutch firm. All Swip’s Europe ex UK Oeic funds are first quartile over one, two and three years, according to Morningstar.

Wearmouth will be assisted on the European Income fund by Bolton, along with Alister Hibbert, manager of the Scottish Widows European Select Growth fund, Vincent Devlin, manager of Swip European, and Rory Hammerson, manager of Swip Pan Euro- pean Smaller Companies.

The European Income fund will be a UK-listed Oeic and classified in the Europe excluding UK sector. Its initial charge is 5%. The annual fee is 1.5%.