Aviva Investors closes one US equity fund, launches another
Aviva Investors is to launch a new US equity fund in September following the soft close of its existing US Equity Income fund, following strong inflows from UK investors over the 12 months.
The £366m fund has returned 29.3% since inception in July 2011, against an average sector return of 23.2% for the UK Investment Management Association’s North America sector, according to figures from Aviva Investors.
To meet demand, the manager will launch the US Equity Income Fund II in September. The new fund will be managed by the same team of Henry Sanders and Thomas Forsha at US equity subsidiary River Road Asset Management. They will aim to deliver a yield that is 1.5% higher than the Russell 3000 Value Index, investing manily in equities listed on North American exchanges with minimum market capitalisation of $1bn.
However, Jeremy Leadsom, sales director for UK Financial Institutions at Aviva Investors, suggested that the portfolio will have a greater bias toward large cap stocks than the existing fund.
“The new strategy will have a greater large cap bias than its predecessor and will be less constrained while at the same time offering marginally lower volatility,” he said.
“It will nicely complement our existing fund range which includes Chris Murphy’s UK Equity Income and Kirill Pyshkin’s Global Equity Income funds.”
Henry Sanders said: “On the whole, equity income strategies have shown their worth since the financial crisis, with dividend yields helping boost capital gains and offset capital losses. We are expecting markets to see bouts of volatility for some time, but with dividend payments continuing to rise, dividend-focused strategies will continue to provide a regular income stream while offering defensive exposure to equity markets.”