Andrew Herberts, Head of Private Investment Management (UK) at Thomas Miller Investment said the firm would be tapping into what is a very good demand for income funds that can invest globally.
He added: “The beauty of going global is that you can invest in sectors that aren’t well represented in the UK market. You can go best of breed across all sectors, which you can’t do if you are only fishing in the UK equity pond.”
Chris Metcalfe, investment director at IBOSS agreed that global flexibility is important in the current investment environment. “We have been allocating away from traditional UK income funds for some time now, especially the big players, because there is just not enough diversification.”
For Peter Toogood, investment director at City Financial the logic of going global is clear. Yield in many areas of the market is “crazily expensive” and so diversification is increasingly important.
But, he added, another key question is going to be how different this fund is from the existing one. A similar point was made by Adrian Lowcock who highlighted the similarities between Woodford’s the income and high income funds he ran at Invesco Perpetual.
Exactly what the new fund will look will only be known in time, but two things seem clear. The first is that Woodford Investment Management feels confident that it can find a yield of at least 4.5%, the second is that, in order to do achieve that some flexibility in terms of geography is likely to come in handy.
