Rudolf Wolff Limited has launched the Building Society Income Fund in response to investors’ requirement of achieving a sustainable level of income in this low interest rate environment. The fund will target a net return in excess of 7% p.a. which will be distributed bi- annually.
“Investors’ goals have not changed over time – they want security, income, liquidity and capital preservation. What has changed is that the opportunities to achieve those aims have been dramatically reduced.
“Investors seeking income are currently facing a number of pressing concerns: historically low dividend yields, interest rates at all-time lows, falling real estate yields and uncertain bond and equity markets. This fund seeks to address these issues by investing in a diversified portfolio of PIBS, regulated financial instruments issued by Mutual Building Societies, listed on the London Stock Exchange, that pay fixed rates of interest bi-annually,” said Paul Gleeson of Arcanum Asset Management Limited.
The fund will be advised by Gleeson who has over 25 years experience in fund management.
Recent research by HSBC(1) shows that over half a million fixed income depositors will see their three year 7% terms expire in the next few weeks. “For many investors the Fund will provide a great solution,” adds Gleeson.
“The current economic turmoil is likely to continue for at least another four years as the excesses of the last ten years are purged out of the system and during this time we will continue to go through extreme volatility in all major markets, deflation and a continuation of these historically low interest rates. Mutual Building Societies are currently among the strongest financial institutions in the country and the Fund provides an excellent lifeboat to ride out that storm,” he said.
The Fund offers monthly liquidity and has a minimum investment of £10,000. The portfolio may include PIBS issued by the following building societies: Skipton, Principality, Coventry, Nationwide, Yorkshire, Co-operative Bank, Newcastle, Nottingham and Leeds.
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