The wealth manager has introduced the Rathbone Strategic Income Portfolio and made several tweaks to its multi-asset fund range.

Rathbone Unit Trust Management, part of London-listed Rathbones, has launched a global multi-asset income fund for medium-risk investors.

The Rathbone Strategic Income Portfolio will invest in a wide range of asset classes, including large-cap direct equities and bonds, to focus on underlying investments that can generate a regular income stream and retain their real capital value. 

It will aim to deliver a gross yield of at least 3 per cent, paid monthly, within a total return of CPI +3 per cent to 5 per cent over a five to seven year investment horizon, while adopting a targeted risk budget of two-thirds of the MSCI World Index. The fund will base its asset allocation approach on that of the Rathbone Strategic Growth Portfolio, which has returned 10.3 per cent over one year.

“It [the fund] meets the ongoing demand for income in an environment of low economic growth and low interest rates, where many investors are forced to drawdown capital to maintain their lifestyles,” said the chief executive at Rathbone Unit Trust Management, Mike Webb.

“We have designed a portfolio that should deliver a realistic and sustainable income stream within acceptable risk parameters, rather than chasing higher-yielding opportunities that carry a worryingly disproportionate element of risk,” added David Coombs, head of multi-asset investments.

Subject to approval from the UK's Financial Conduct Authority, the fund will go live in October after a fixed-price launch period starting mid-September.

In other changes, all four funds within Rathbones' multi-asset range, including the Rathbone Strategic Growth Portfolio, Rathbone Total Return Portfolio and Rathbone Enhanced Growth Portfolio, will drop the I-class share in favour of the S-class. The switch will bring down the range's annual management charge from 0.75 per cent to 0.5 per cent, while lowering the ongoing charges figure (OCF) for investors.

The multi-asset range's administration fees will now be met by Rathbone Unit Trust Management rather than through the funds as they were previously. This will reduce the OCF by a further 0.11 percentage points. Additionally, the range will include direct large-cap equity holdings as of October, helping to bring down the funds' OCF even lower.

Lastly, the Rathbone Enhanced Growth Portfolio’s targeted return benchmark will be brought into line with the rest of the multi-asset range from October, with a target in excess of CPI +5 per cent. The fund currently aims to deliver 2 per cent more than a combined benchmark of 70 per cent MSCI World Index and 30 per cent MSCI Emerging Markets Index.