Scottish asset manager Aegon is launching a UK Equity Income Fund at the end of this month. The offering will be joint managed by Douglas Scott and Iain Wells. Messrs Scott and Wells currently run Scottish Equitable Distribution Life Fund.

The Aegon UK Equity Income Fund will seek to earn an income of 110 per cent of the FTSE Share as at 31 July each year. The fund will invest at least 80 per cent UK equities but will have the flexibility to make tactical investment in bonds and overseas equities.

“The fund should appeal to those retail investors looking for competitive income plus the potential for growth through a broad portfolio of UK equities,” said Aegon’s head of sales, Steve Kenny.

In May, Aegon said it would close its retail European Bond and UK Cautious Managed Funds with effect from the 31 July, as they are now at a level that makes them uneconomical to run. Sales and marketing director Jon Bennett said this is because the costs of running the funds, such as dealing charges and fees to auditors, could potentially begin to erode investor capital.