Cazenove Diversity Income 'may undershoot yield target'

The managers of Cazenove's newly launched Diversity Income fund have warned they may prioritise downside capital protection during volatile markets, meaning they could miss their 4% yield target.

The managers of the £8m fund, which launched in December 2010, say there will be some years when they undershoot their target figure. Robin McDonald says: "4% income per annum is a medium term target, although there will be years where we underperform that target. "But that will be likely through periods where we consider downside risk management to be of critical importance." Marcus Brookes adds: "If we see a significant possibility of a drawdown, we will move the portfolio to defend against it and preserve capital." "That may mean, shorter term, the income is reduced, but it i...