Argonaut unveils call-writing Euro Enhanced Income fund

Argonaut Capital is set to roll out its European Enhanced Income fund, the UK market's first onshore fund utilising a covered-call strategy on overseas equities.

Run by Oliver Russ, the Ignis Argonaut European Enhanced Income fund will be based upon the manager’s £427m European Income fund, but hedged to sterling to neutralise currency risk. By selling call options against the 30 to 55 stocks portfolio, Argonaut is targeting a yield of about 7% in its initial year, with the objective adjusting annually within a range of 5% to 9%. Unlike the un-hedged European Income fund, the new hedged vehicle provides investors with an option on currency depending upon their view on sterling relative to the euro. Call-writing equity income funds have alre...