SYZ Asset Management has expanded its range of high-alpha European strategies with the launch of the OYSTER Continental European Income fund. The new fund seeks to generate income from underinvested areas in European markets (ex-UK). The Luxembourg Sicav fund will be managed by SYZ Asset Management’s head of European equities, Michael Clements.
The income strategy of the OYSTER Continental European Income fund targets a yield that is at least 10% above that of the index (MSCI Europe ex-UK). The fund arrives on the back of increased demand from investors, who have struggled to find quality yielding solutions. SYZ’s London-based European Equities team has successfully managed the OYSTER Continental European Selection fund since 2014, returning +48.3% over three years compared to the MSCI Europe ex-UK index, which returned +32.0%.
The new strategy applies a similar investment approach to the OYSTER Continental European Selection fund: an all-cap, high-conviction and contrarian portfolio that seeks to generate consistent alpha from rigorous bottom-up stock selection and fundamental research. It is aimed at investors seeking an income as well as capital growth, the fund will also apply a further element to the process, identifying companies that deliver a sustainable and growing dividend.
Michael Clements, head of European equities at SYZ Asset Management, said: “Most European income funds focus on traditional high-yielding sectors, such as utilities and telecoms. However, we have a different perspective, which often leads us to contrarian positions in less obvious areas. This fundamental long-term approach aims to deliver a consistent steam of yield, but also an attractive diversification element compared to existing income funds.”
At a time of rising volatility and fears over future dividend cuts, the fund utilises a disciplined risk management process which aims to offer downside risk protection and dividend cover.
Its investment process includes a strong focus on downside risk and capital preservation, in addition to evaluating the upside market price potential of a company.