Octopus Investments, part of the Octopus Group, is set to launch the FP Octopus UK Multi Cap Income Fund on the back of sustained investor demand for income in a low-interest rate environment. The Fund will take advantage of Octopus’ stock picking expertise to drive income, as well as target better than market returns, through a diversified portfolio of UK quoted companies.
Investing across the entire market cap spectrum, the Fund will blend earnings and dividend growth from a diverse range of businesses from the FTSE 100, through to mid and small cap equities without relying on the limited number of traditional go-to dividend-paying stocks. Targeting a yield of 4%, the Fund aims to deliver predictable, growing dividends paid on a quarterly basis.
The case for equity income is well understood, offering investors scope for sustainable and growing dividends, with the potential for capital growth. However, as just 10 stocks represent 54% of forecast FTSE 100 dividend payments for 2018, and almost three-quarters of traditional income funds hold these stocks, there is significant concentration within the income sector. Taking a multi-cap approach this new Fund will offer investors asset diversification across the portfolio.
The Fund will be managed by the Quoted Companies team led by Richard Power and expands Octopus’ growing range of retail and institutional funds. Richard has over 20 years’ experience of smaller companies investing and the team collectively manages over £1.7 billion of assets in companies ranging in market cap from £10 million to over £3 billion. Chris McVey, will be responsible for the day-to-day management of the fund, leaning on two decades’ experience in small and mid-caps.
Commenting on the launch Chris McVey, Octopus Fund Manager, said:
“Small and mid-size companies consistently outperform their larger peers, while also demonstrating faster growth in earnings and dividends. By harnessing this growth potential and blending it with exposure to larger, more established businesses, we believe we can offer investors an attractive and more diversified route to income while providing scope for better than market capital performance. Octopus’ long-established expertise in finding attractive businesses with strong fundamentals makes us uniquely placed to create growth and income for our investors through this strategy.”
The new fund will be a sister fund of the FP Octopus UK Micro Cap Growth Fund, managed by the same team and following a similar bottom-up investment approach. The FP Octopus UK Micro Cap Growth Fund, which aims to achieve capital growth by investing in a portfolio of high-quality UK companies quoted on the LSE, AIM and NEX markets has a strong track record and is ranked 6th out of 46 Unit Trusts and OEICs in its sector over the past three years.
The offer period for the new Fund will open on 26 November with a limited availability share class that has a discounted annual management charge of 0.30%, giving an ongoing charges figure (OCF) of just 0.45%. The new fund will officially launch on 10 December.
For journalists in their professional capacity only. The value of an investment and any income from it can fall as well as rise. Investors may not get back the full amount they invest. Yield is not guaranteed. Investments in smaller and/or medium-sized companies are likely to fall and rise in value more than shares listed on the main market of the London Stock Exchange, they may also be harder to sell. Fees will be deducted from capital which will increase the amount of income available for distribution. However, this will erode capital and may hinder capital growth. Personal opinions may change and should not be seen as advice or a recommendation. We do not offer investment or tax advice. We recommend investors seek professional advice before deciding to invest. Before investing you should read the Prospectus, the Key Investor Information Document (KIID) and the Supplementary Information Document (SID) as they contain important information regarding the fund, including charges, tax and fund specific risk warnings and will form the basis of any investment. The Prospectus, KIID and application forms are available in English at octopusinvestments.com. The ACD of the FP Octopus UK Multi Cap Income Fund is FundRock Partners Ltd which is authorised and regulated by the Financial Conduct Authority no. 469278, Registered Office: Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset BH21 7SB. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: November 2018.