Sanlam FOUR has launched the Sanlam FOUR UK Income Opportunities Fund, which will be managed by Tom Carroll, Chris Rodgers and Alex Schlich.
The new Fund aims to differentiate itself from the bulk of the mainstream Income funds in the UK by focusing on stocks which have the potential to grow their dividends from a strong base. These companies are likely to have strong business franchises, exhibit structural growth or have self-help opportunities.
An emphasis on mid and small cap stocks offers the opportunity for greater dividend growth, as opposed to relying on the five big payers where there are concerns over the long term growth or even sustainability of their dividends.
Sanlam FOUR believes this investment approach has led the firm to construct a portfolio which currently offers a different sector and market cap exposure to many other income funds.
In an environment where companies are in general, over distributing, and are likely to see little growth or even cuts, our companies are exhibiting strong cover and an ability to grow.
At launch the Fund has a forecast prospective dividend yield of 4.8 per cent and dividend growth of over 10 per cent. The Fund will pay dividends quarterly in February, May, August and November.
“The focus of this new Fund is on strong companies, irrespective of size, which can grow their dividend payments significantly over the medium term, says Carroll. “This clearly differentiates the Fund from much of the sector, where there is an unwarranted bias towards large, high yielding but low growth companies. In an environment where dividend cover is low, debt has risen and revenue growth is hard to find, we are confident in the ability of this Fund to deliver an attractive blend of a good initial yield alongside income and capital growth.”
