Schroders is to launch the third fund in its income maximiser range, a global property fund seeking a 7% annual yield, next February.
The Schroder Global Property Income Maximiser fund will invest in higher yielding global property securities and real estate investment trusts (Reits). As with the two income maximiser funds – Income and Asian Income – the global property fund, which is still subject to regulatory approval, will adopt a covered call option overlay to enhance its yield.
Thomas See, the head of structured fund management, will co-manage the fund alongside Jim Rehlaender, the manager of the Schroder Global Property Securities fund, and Al Otero, an American-based global securities manager. (article continues below)
Rehlaender and Otero will be responsible for stock selection, while See will be in charge of the covered call strategy.
According to Schroders, the fund will follow a similar stock selection strategy as Global Property Securities.
However, it is anticipated that the Global Property Income Maximiser will have a greater exposure to the American Reit market, which the group says is particularly suited to income generation through dividend and covered call writing.
The fund will be structured as an authorised unit trust, offering daily dealing. The income will be paid quarterly.
Ben Yearsley, a senior investment manager at Hargreaves Lansdown, was cautious: “Property/Reits could be too volatile for this kind of approach.”