19 June 2017
New York
Reporter: Drew Nicol

Howard/Miller adjusts fund’s lending programme


US investment manager Howard/Miller Investments has revised its investment policy for its high income equity fund to exempt its securities lending activities from its leverage limits to allow for a more flexible policy.

The firm, which manages $6.6 billion in assets, explained in a note to investors that securities lending and other financing activity, such as repo and swaps, currently fall under the ‘effective’ portion of the fund’s leverage strategy, as they have “have similar effects as leverage”.

There is currently a 20 percent leverage limit on assets within the fund, but Howard/Miller has decided to exempt securities lending from this, to allow the fund “to deploy a more flexible securities lending policy”, according to a spokesperson.

“A securities lending programme, in our view, should benefit the fund and its shareholders by generating additional income.”

The calculation of the 20 percent leverage limit on assets will no longer apply to securities lending transactions as of 15 August.

Miller/Howard focuses on income-producing equities, with an emphasis on high-quality stocks with high yield and strong dividend growth.

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