Equity income opportunities to be found across Europe

Fidelity’s MultiManager Investment Team has increased the exposure to Europe within the Fidelity MultiManager Distribution Fund, with the addition of the first ‘European Equity Income Fund’ to the portfolio.

Resolution Argonaut’s European Income Fund has been added to Fidelity’s MultiManager Distribution Fund. It is one of the first such funds to be launched into the UK retail market and offers the potential to exploit the attractive yields currently available in Europe.

Unlike many of its peers, Fidelity’s MultiManager Distribution Fund already benefits from exposure to Europe within the fixed income portion of the portfolio, however, the addition of a further European fund is set to bring additional diversification.

Simon Mungall, Co-Portfolio Manager of MultiManager Distribution Fund explains: “Until now, the Fund has benefited from exposure to European Fixed Income, but we believe that exposure to European Equity Income will bring additional diversification.

“Currently, there are attractive yields available in Europe – as well as the positive impact of historically high earnings on corporate cash flows, we have seen dividend payout ratios increase in recent years as European companies play catch-up with their Anglo Saxon peers. The Resolution Argonaut European Income Fund is positioned to enable us to exploit this.”

Resolution Argonaut European Income Fund is managed by Oliver Russ, who together with Barry Norris formed Argonaut in conjunction with Resolution Asset Management. The Fund is a relatively concentrated best ideas fund that draws heavily on the core investment process-it is a pragmatic, bottom-up approach to income investing. The Fund currently yields 4 per cent net (March 31st – Resolution).

The Fidelity MultiManager Distribution Fund is managed by Fidelity’s highly-regarded multi-manager team, led by Richard Skelt. The Fund aims to invest 40 per cent in Equity Income funds (for capital growth and yield), 40 per cent in Bond funds (for capital preservation and yield) and 20 per cent in Property Funds (for yield).

The annual management fee is 1 per cent and, as with Fidelity’s core multi-manager products, there is a 2 per cent ceiling on total annual expenses. The initial charge is 3.5per cent. The fund is eligible for inclusion in an ISA, self-invested personal pension (SIPP) and the FundsNetworkTM Onshore Investment Bond. Minimum contributions start at £50 per month.