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RWC Partners to launch high conviction global equity income fund

22 September 2020

RWC Partners is to launch a high conviction global equity income fund for income veteran Nick Clay.

Clay will lead RWC Partners’ new global equity income tea and will launch the high conviction global equity income fund in Q4 2020.

Shaped by Clay since 2012, the team and process behind the fund will be largely the same as the one that saw Clay’s assets at Newton reach £10bn.

Clay has been managing a disciplined dividend-focused strategy for over eight years. The RWC Global Equity Income Fund will have a similar mandate to the BNY Mellon Global Income Fund, which generated 2.4% outperformance net of fees per annum.

The team has honed a process of stock selection in a concentrated, high active share portfolio, with emphasis placed on providing a consistent income, growing dividend distributions at 5.9% per annum over the last five years.

Gary Tuffield, head of European Sales at RWC, commented: “With interest rates anchored at 300 year lows and credit spreads back to pre-pandemic levels, investors are being woefully compensated for the significant rise in defaults that we are witnessing and a genuine lack of yield from deposit accounts. With many companies currently aggressively slashing dividends to fund short-term cash flows, the need for a disciplined and proven process to identify quality companies that have the ability to not only generate, but sustain a reasonable level of dividend income, is needed now more than ever.

“Nick, Andrew, Robert and Colin, with over 90 years of combined industry experience, are recognised as one of the most experienced portfolio management teams in the industry and we believe they, via their process, can exploit opportunities that are beginning to arise, by seeking to deliver investors a safe and consistent place to generate a differentiated return stream, with an attractive source of income from a portfolio of global equities”.

The new fund will have a strict buy and sell discipline and follow a high conviction quality income strategy, investing in c. 40-60 stocks across the global market capitalisation spectrum.

The fund will be broadly diversified across sectors but could be materially underweight or completely omit a number of sectors if they are deemed unattractive.

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