Income Opportunities Fund
Description:
The Income Opportunities Fund is an actively managed portfolio primarily comprising global equities but with the flexibility to invest in assets which offer attractive income and reasonable value. These assets include fixed income, property (including REITs) and cash. The fund is not constrained by limitations on the level of any given asset. In practice, the Fund has had its greatest weight in equities, reflecting the breadth of that market, Setanta’s expertise in that area, and the option writing strategy employed by the fund. Nevertheless, property, fixed income and cash have all played meaningful roles in past returns of the fund, at times, comprising up to 50% of the fund’s assets. The portfolio is managed in accordance with the Setanta investment philosophy. That is, the managers seek to own good assets for the long-term at prices below what they think they’re worth, carefully considering each investment’s risk profile.
The fund is managed by three portfolio managers, who also look to leverage off the experience and knowledge of their colleagues. The aim is to achieve a sensible level of diversification on a sector and geographic basis. Investments are chosen through bottom-up analysis, based on investment merit. Rather than focusing on the historic level of volatility of an asset, the portfolio managers regard the probability of permanent impairment of capital as the most relevant measure of risk. In doing so, they seek to maximise downside protection by understanding the risks posed by the valuation, financial, and operational characteristics of the asset.
The fund employs an option writing strategy. This entails the sale of both call and put options in return for a cash premium, representing an income stream that boosts the underlying income yield of the fund. This strategy is employed in a conservative fashion, as all options written are fully covered.
Investment Objective:
The Income Opportunities Fund has two investment objectives:
- To generate an annual income yield at a target rate. This is declared at the start of each financial year.
- To achieve capital appreciation over the long term.
The Income Target for 2024 is 4.1%.
Key Information & Disclosures(s)
The Income Opportunities Fund is managed by Setanta Asset Management Limited and is a representative account of the strategy. The Fund is currently available in Ireland via a unit-linked offering of Irish Life Assurance. Learn more
The EU Sustainable Finance Disclosure Regulation (“SFDR”) requires a determination, on a product-by-product basis, whether sustainability risks are relevant to financial products. For the purposes of SFDR, “sustainability risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.
While sustainability risks might (from an economic perspective) have a material negative effect on the returns of the Income Opportunities Strategy, we have determined that sustainability risks are not relevant to the Strategy. The Strategy does not expressly promote or have a core objective concerning sustainability matters as set out in SFDR, or expressly oblige Setanta to integrate sustainability risks into its investment decision making and/or assess the likely impacts of sustainability risks on the returns of the Strategy.
Setanta will keep its assessment that sustainability risks are not relevant to the Strategy under regular review. Setanta has implemented a policy in respect of the integration of sustainability risks in its investment decision making process on a firm-wide basis. This policy is available here.
The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.
WARNING: Past performance is not a reliable indicator of future results. The price of units and the income from them may go down as well as up and investors may not get back the amount invested. The return may increase or decrease as a result of currency fluctuations. Forecasts are not a reliable indicator of future performance.