Rathbone Unit Trust Management has announced plans to launch an offshore version of the Rathbone Income Fund to international investors based in Continental Europe and beyond.
Domiciled in Luxembourg, the proposed fund will invest via a master-feeder structure into the Rathbone Income Fund, the firm’s longest-standing fund, lead-managed by Carl Stick and supported by the Rathbone income team.
The initial focus for distribution will be on Belgium, Ireland, Spain and France, the company said in a statement today. Once approved by regulators, the sub-fund will be part of Rathbones’ SICAV umbrella that was launched in May this year.
This umbrella holds the offshore feeder funds for the Rathbone Ethical Bond Fund and the Rathbone Multi-Asset Total Return, Multi-Asset Strategic Growth, and Multi-Asset Enhanced Growth Portfolios.
The Rathbone Income Fund offshore feeder is expected to launched in October, subject to regulatory approval from the CSSF (Commission de Surveillance du Secteur Financier), the Luxembourg regulatory body. The fund will be marketed predominantly to retail investors via financial advisers, life companies and QROPS providers (Qualifying Recognised Overseas Pension Schemes) in the UK and in Europe.
The investment process and objective of the fund will remain unchanged from that of the master fund in the UK. The fund will have sterling and euro share classes available at launch. There is also the ability to create dollar share classes if there is sufficient demand.
Mike Webb, chief executive of Rathbone Unit Trust Management (pictured above), said: “The addition of the Rathbone Income Fund, as a master feeder structure to our Luxembourg range, will give investors access to our longest-standing fund in the UK.
“With a tried and tested process led by Carl Stick, the fund has produced an enviable performance record, including a long history of income growth. It has an attractive and sustainable starting yield, as well as good prospects for growth. We are seeing a strong level of interest from our distribution partners, particularly considering the current low levels of interest rates and bond yields.”
Carl Stick, manager of the Rathbone Income Fund, said that the impending launch of the Rathbone Income Fund into the offshore market has come at “a fascinating time for investors”.
“Yields are at all-time lows, the search for income is intense; yet, are we on the cusp of a change in the interest rate cycle, led by the US?,” said Stick. “In the UK, we experienced the shock of a vote to Brexit, yet corporate and economic news at this early stage presents a veritable shrug of the shoulders, so markets have tottered on higher.
“Our focus has always been on the mitigation of downside risk, as well as the generation of total returns, and we have always favoured sustainable dividends over higher, riskier yields – these tenets focus our minds and our investment discipline,” he said.