Threadneedle converts Asia fund to focus on income

Threadneedle points to strong investor demand for income in a low interest rate environment as a key reason to convert its existing (Lux) Asia Fund into the new (Lux) Asian Equity Income Fund.

The fund, which Threadneedle said will complement its existing range of dividend funds, will invest in Asian companies delivering dividends and sustainable growth.

Manager George Gosden will draw on ideas from 11 fund managers and analysts in Threadneedle’s Asia and Emerging Markets Equity team, as well as the Global Equity team, in order to achieve yield in excess of the benchmark.

Gosden said: “With this fund, I am looking for quality income stocks in Asia’s relatively high-growth environment. These are companies which are both growing their businesses, as well as delivering a sustainable and increasing yield.”

“Dividend growth is expected to continue to accelerate in the Asian region over the coming year supported by robust corporate earnings growth and income generating opportunities can be found across the broad spectrum of countries and sectors in the region. Within ASEAN countries many companies are boosting dividends as they benefit from strong domestic consumption growth whilst elsewhere more cyclical companies are poised to benefit from any recovery in global growth. In addition the adoption of more progressive capital management and governance policies further underpin the outlook for dividends in the region.”

Dominik Kremer, Threadneedle’s head of European Distribution said: “The Threadneedle (Lux) Asian Equity Income Fund will complement our range of market-leading equity income funds, which already covers the UK, US, European and Global markets.”

“When compared with other asset classes, dividend yields from equities offer the potential for superior income opportunities, which is why we are seeing strong investor demand for income funds. By repositioning the Asian portfolio, clients will be able to access a good income at the same time as having exposure to the long term growth of Asian markets.”

Threadneedle manages over €4bn in equity income strategies globally.


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