Aviva Investors is to launch a second US equity income fund in September and soft close an existing product in early October.
Aviva says its US Equity Income Fund, which targets stocks of all market caps, received strong inflows from UK investors over the last 12 months and the new fund, which will favour stocks over $1 billion (€752 million) and will be named the Aviva Investors US Equity Income Fund II, will absorb additional demand.
The current fund has £366 million (€421 million) of assets under management and is managed by a US subsidiary, River Road Asset Management. It has returned 29.3% since inception in July 2011 versus an IMA North America sector return of 23.2%, Aviva Investors says.
The soft closure intends to protect the interest of current investors and ensure the fund can continue to be managed in accordance with its investment strategy.
The new fund will have the same managers – Henry W Sanders III and Thomas S Forsha – and is subject to regulatory approval. It will aim to deliver a dividend yield 1.5% higher than the Russell 3000 Value Index and the annual management charge on the retail share class in line with the retail distribution review, which brought in sweeping changes to the UK retail funds market, will be 0.75%.
Sanders says: “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.”
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