Octopus Investments, part of the Octopus Group, is set to launch the FP Octopus UK Multi Cap Income Fund, following investor demand for income in a low interest rate market.
The retail fund will use Octopus’s stockpicking knowledge 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.
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’s 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 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 2018, expanding Octopus’s growing range of retail funds.
Targeting a yield of 4%, the fund aims to deliver “growing” dividends, paid on a quarterly basis.
Taking a multi-cap approach, it will offer investors asset diversification across the portfolio.
The fund will be managed by the group’s Quoted companies team, led by Richard Power, who has more than 20 years’ experience of smaller companies
McVey will be responsible for the day-to-day management of the fund.
The new vehicle 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.