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Harewood Solutions launches US Enhanced Income Fund

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Harewood Solutions, a part of BNP Paribas, is increasing its range of income products with the launch of the US Enhanced Income Fund. 

The fund will be aiming to generate a gross yield of eight per cent per annum, paid quarterly, and at the same time provide the potential for capital growth via an underlying exposure to the S&P 500 Index.  
 
The fund will be quoted on the London Stock Exchange and offers investors’ daily liquidity and a tight bid offer spread around NAV.
 
High income is generated by equity dividends received on the S&P 500 Index and BNP Paribas’ daily buy-write strategy which sells short term call options on a daily basis. This strategy allows the fund to capture positive equity market performance whilst simultaneously affording the NAV with some protection in falling markets. 
 
The fund’s exposure to the S&P 500 Index TR Index and to the enhanced buy-write strategy is provided via a contract with BNP Paribas. Shares held by investors benefit from the collateral of AAA G7 government bonds to offset any credit risk in respect of the counterparty.  
 
Ryan Rogowski, head of Harewood Solutions, BNP Paribas, says: ‘The US Enhanced Income Fund not only offers a high and sustainable income stream but it can also form part of an investor’s defensive equity strategy, providing for a more seamless transition back into equity markets. BNP Paribas has a proven track record and all the right credentials to satisfy this market demand.
 
‘This is an excellent way of gaining exposure to US equities, an asset class in which it is notoriously difficult to find an actively managed fund that has consistently outperformed. Nonetheless, something rather more than a straight passive fund, with its vulnerability to market swings is called for. The US Enhanced Income Fund fits the bill.’

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