America’s “sound” economy makes a strong case for investing in US equity income, said BNY Mellon Investment Management this morning as it launched a fund with this theme.
Boston Company Asset Management, a US active manager with $38.1 billion (€35.6 billion) in assets and majority owned by BNY, will manage the product, which is called the BNY Mellon US Equity Income Fund.
The fund will follow the same strategy as its US-domiciled equivalent, the BNY Mellon Income Stock Fund that targets high dividend yield, and will focus on stocks that offer dividend growth, solid fundamentals and attractive valuations.
It will invest in 30 to 60 US equities with broad sector exposure and has a yield target 50% greater than the yield of the S&P 500 Index, the fund’s benchmark.
John Bailer, head of the fund’s investment team, said that given US corporations are sitting on over $4.3 trillion in cash balances and their cash flow from operating activities is currently at record levels - coupled with a “fundamentally sound” US economy - means there’s a “strong case” for investing in US equity income.
The fund is a Dublin-domiciled Ucits product and available to purchase in most major European destinations including Germany, France and the UK.
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