Standard Life Investments launches American equity income fund

The Edinburgh-based global investment manager said the fund expands its suite of geographical income solutions it offers which includes UK, European, Global Emerging Markets & Global offerings.

It launches at a time when dividend paying stocks offer lower volatility, and dividend yield and growth remain key drivers of equity returns in the US.

Having successfully managed a similar strategy for the last four years, Scott Eun will manage the OEIC with the support of Warren Gibbon and the broader US equity team of 10, who are also based in Standard Life Investments’ Boston office.

Managed with a total return approach, the fund will comprise circa sixty dividend generating US stocks across various industries with the aim of producing superior returns with an overall dividend yield higher than the S&P500. Using Standard Life Investments’ bottom up approach, the Fund will have exposure to a diversity of stocks, both defensive and cyclical. It will target a balance of high dividend, dividend growth and opportunity stocks.

Jeff Morris, head of US Equities, Standard Life Investments, said: “This is an exciting offering for investors looking for exposure to the US equity market. The vehicle’s income mandate helps reduce some of the volatility and potential downside inherent in the market while its total return approach offers the ability to perform in positive markets. Scott is an experienced manager with a solid track record behind him and the fact that we can now offer an income solution alongside the existing American Equity Unconstrained Fund is an exciting development for our team.

“Although the US is not always synonymous with income investing, there are a number of companies that have delivered stable income streams and are growing dividends. There’s also a broad spread of sectors in the US that offer income-yielding opportunities, with over 80 per cent of companies in the S&P500 currently paying a dividend. I’m confident that in this Fund, investors will benefit from the breadth and depth of investment expertise available at Standard Life Investments which will allow us to identify a variety of compelling investment ideas with attractive and growing dividends.”

SLI said its US equity team benefit from the expertise of the 60 strong equity capability at the firm and work in tandem with the Credit, Strategy and ESG teams all of whom adhere to the asset managers’ central Focus on Change investment philosophy.