Schroders adds US call overwriting strategy to Maximiser range

The fund will aim to deliver 5% income per year, paid quarterly, by investing in some of the largest companies in the US. The fund will hold a portfolio of equities providing an exposure similar to that of the largest US companies weighted by market capitalisation.

Mike Hodgson, head of risk managed investments & structuring, will be responsible for managing the portfolio including the call option overlay strategy and will be supported by a team of four dedicated structured investment managers

The Schroders' Maximiser strategy 'has a proven track record in enhancing equity yield in all market conditions', said James Rainbow (pictured), co-head of UK intermediary at the fund. 'This is the first time the Maximiser strategy has invested solely in the US market and we are excited to be offering an attractive solution for investors who not only want to invest in large US companies but also require a higher income from their investments,' said Rainbow, in a statement.

The Maximiser strategy enables the fund manager to include 'tech stocks that are currently paying little or nothing in the way of dividends and generate this income from them', according to Rainbow. 'We have been managing similar strategies covering the UK and international equity markets since 2005 giving us many years of experience and expertise in delivering this income while still providing capital growth potential.'

As with other funds in the Maximiser range, the fund will add a covered call option overlay to enhance the yield. The fund will be managed by Schroders' Risk Managed Investments team. Mike Hodgson, head of risk managed investments & structuring, will be responsible for managing the portfolio including the call option overlay strategy and will be supported by a team of four dedicated structured investment managers.

Hodgson has nearly 30 years of experience, while the four managers have a further 53 years of experience between them, with £6.2bn in assets under management (AUM) across the Maximiser range, according to Schroders. Hodgson replaced Thomas See in the summer of 2016 following a restructuring that resulted in the asset manager merging its business division with its portfolio solutions arm.

The Schroder Income Maximiser has returned 36.6% over the last five years compared with a 35.5% rise in its benchmark, the FTSE All Share Total Return, but failed to deliver the 7% annual target income in 2015 (-5.7%).

The Maximiser range is comprised of four call-overwriting structures, as well as the Schroder Global Property Income Maximiser, which was launched in 2010. The Maximiser strategy is currently employed in seven listed UK and Luxembourg-domiciled funds, with a total of US$3.9bn in assets under management.

Schroders also reshuffled its multi-asset and portfolio solutions (Maps) teams in 2016 after the departure of Nicolaas Marais who headed the business. In addition, the portfolio solutions team was split from the multi-asset investments' division, and is now be co-headed by John McLaughlin and Andrew Connell.

Schroders' Maximiser range is completed by the Global Dividend Maximiser fund which was launched in 2007, and the European Dividend Maximiser, as well as the Global Property Income Maximiser Fund, which was launched in 2010.

Schroders Maps team also manages the Schroder Volatility Controlled Equity Fund, UK's first volatility controlled equity fund with downside protection which was launched at the end of 2015. The fund aims to give investors exposure to global equities while maintaining a protected approach to volatility. This is achieved through exposure to a volatility targeted global equity index via the MSCI Net Total Return Developed World Index, with downside protection gained through a rolling programme of monthly put options.