Old Mutual Global Investors has changed the focus of one of its Asia equity funds to respond to client thirst for income.

Old Mutual Global Investors, part of Old Mutual Wealth, has announced that an Asian equities fund is to be refocused and renamed because of a new emphasis on generating equity income. 

The Old Mutual Asian Equity Fund, with $212 million of assets under management, is to be rebranded as the Old Mutual Asian Equity Income Fund, subject to shareholder approval. The target date for the change is 30 July, OMGI said in a statement yesterday.

The fund, which has been managed by Josh Crabb since October 2014, is a sub-fund of the Dublin-domiciled Old Mutual Global Investors Series umbrella fund. It is managed by Crabb and his team, who are based in Hong Kong. 

The fund’s investment objective has been changed to reflect what clients want, the firm said, and will invest in companies from across the market capitalisation spectrum and which aim to pay an above-market yield across the economic cycle.

“Old Mutual Global Investors believes this development will benefit clients as they will be able to access the region’s growing dividend stream as well as obtaining above average earnings per share growth. Studies show that the Asia-Pacific region over a ten-year cumulative period has paid consistently higher dividends as a percentage of total returns than both the US and Europe, as well as delivering overall higher total shareholder returns,” the firm said, citing evidence from UBS.

(Editor's note: such a change highlights how in a world of ultra-low interest rates and a hunger for yield, there is demand for income-generating equity funds. This may also suggest that Asian companies are increasingly mindful of the need to generate free cashflow to pay investors.).