(London) – Aviva Investors, the global asset management business of Aviva plc, has today announced that it has launched a SICAV fund inspired by the existing Global Equity Income Strategy.
- The launch comes as a result of growing demand from investors seeking resilience and growing income across changeable market conditions.
- The fund will be similar to existing portfolios in the Global Equity Income Strategy that has been managed by Richard Saldanha since November 2013. The separate strategy, managed since 2013, has delivered net performance of 11.20 per cent in the last 10 years1. It has a top-decile performance in comparison to its peers over a 3-year, 5-year, and 10-year period2.
The fund launch comes as a result of substantial investor demand for equity income solutions, which have provided relative drawdown protection against a backdrop of a high inflation, high interest rate environment. The SICAV will be domiciled in Luxembourg, and available to investors across Europe3.
The new Global Equity Income fund utilises a high-conviction philosophy with the objective of delivering income and capital growth over the long-term by investing in companies that pay sustainable and growing dividends with a focus on finding opportunities outside of traditional income sectors, which can also help the fund keep pace with rising equity markets.
The existing Strategy has been managed by Richard Saldanha, portfolio manager, since November 2013. He is supported by co-portfolio manager Matt Kirby. The Strategy, like the new SICAV, is also benchmarked against the MSCI All Country World Index and has produced top decile returns amongst its peer group on a 3-year, 5-year and 10-year time period.4
The key difference from the existing strategy is that the new SICAV fund, intends to adopt a dynamic mean reversion process of writing listed covered call options and put options on 20% of the Fund AUM. The premiums received on the options aim to provide income uplift. The mean reversion programme would be managed by the Aviva Investors Implementation team. The portfolio managers will not be managing the portfolio any differently to other portfolios they already manage within the existing Global Equity Income Strategy.
Jill Barber, Global Head of Sales & Distribution, Aviva Investors, said:
“We are delighted to announce the launch of the Global Equity Income SICAV. In the current economic environment, there has been a growing demand in both the UK and Europe for income-generating investment solutions. As such, we are pleased to now be able to offer this product to a wider audience and help investors to achieve their goals.”
Richard Saldanha, Portfolio Manager, Aviva Investors, added:
“We are looking forward to building on the strong track record we have delivered for clients over the past decade with the launch of the SICAV. It is firmly our belief that the current opportunity set for investors seeking companies offering resilient and growing income is compelling. By focusing outside of traditional income sectors, we seek to maximise this opportunity both from an income and capital growth standpoint.”
Investment & currency risk
The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency exchange rates. Changes in currency exchange rates could reduce investment gains or increase investment losses. Exchange rates can change rapidly, significantly and unpredictably. Investors may not get back the original amount invested.
Emerging markets risk : Compared to developed markets, emerging markets can have greater political instability and limited investor rights and freedoms, and their securities can carry higher equity, market, liquidity, credit and currency risk.
Equities risk: Equities can lose value rapidly, can remain at low prices indefinitely, and generally involve higher risks - especially market risk - than bond or money market instruments. Bankruptcy or other financial restructuring can cause the issuer's equities to lose most or all of their value.
Hedging risk: Any measures taken to offset specific risks will generate costs (which reduce performance), could work imperfectly or not at all, and if they do work will reduce opportunities for gain.
Illiquid securities risk: Certain assets held in the Strategy could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.
Income risk: The investment objective of a Strategy is to generate income; at times this may limit opportunities for capital growth.
For further information on risks please see the prospectus.
1 IA Global Equity Income sector TR
2 Aviva Investors Global Equity Income strategy performance vs MSCI ACWI (composite) – see table below
3 Note: The Global Equity Income SICAV fund will be available to investors in the following regions: Austria, Denmark, Finland, France, Germany, Italy (Professional only), Liechtenstein, Netherlands, Norway, Spain, Sweden, Switzerland and UK.
4 IA Global Equity Income sector TR