Income seekers wanting to spread their net a little wider will need to move fast to invest in the first UK-listed Latin American income investment trust before the deadline next week.

Application forms for new ordinary shares for the Aberdeen Latin American Income Fund - within either an Aberdeen Share Plan or stocks and shares Isa – must be received by Aberdeen no later than Wednesday 28 July.

Non-Isa investors wishing to apply for ordinary shares should complete the relevant forms and return these by 30 July.

Managed by Devan Kaloo and Brett Diment, the Aberdeen trust will invest around 60 per cent of the portfolio in equities with the balance invested in sovereign bonds. The trust will aim to pay its first quarterly dividend in January 2011, with an initial yield of no less than 4.25 per cent, which will grow over time.

With UK interest rates on hold at 0.5 per cent in July and companies in emerging markets apparently paying out juicier dividends, many investors are switching their focus to alternative sources of income, such as from Asia or South America.

Martin Bamford, managing director of chartered financial planners Informed Choice, says investing for equity income in non-UK shares is always a challenge and this investment trust makes it easier to allocate to emerging markets when seeking income.  

He also notes the attractive rate of the dividend yield target, set against current low interest rates.  

‘Aberdeen has a good pedigree when it comes to emerging markets and we already include their main emerging markets fund within client portfolios. This launch is likely to be one of many in this particular space, with JPMorgan Asset Management recently launching a similar investment trust,’ Bamford comments.

Income funds can be useful for clients approaching retirement who have the chance to reinvest dividends to enhance capital performance.

Investment fund expert for Heron House Financial Management, Wayne Evans, notes that this fund relies on fixed interest to generate much of its income, with growth stocks to generate capital returns. As such it does not have the traditional equity income approach, and although he will monitor rather than recommend it, he thinks Aberdeen is a good fund manager in emerging markets and says it will be interesting to see how the trust performs.

‘I’m sure we will see lots more global income funds being launched and as ever advisers [and investors] need to discriminate between the quality funds on offer and those merely launched to gain market share,’ he adds.

Investors wanting to take a wait and see approach regarding the income and growth produced by the Aberdeen Latin American Income Fund will be able to buy shares from mid-August when it lists on the UK stock market.

Investors can find information about the new investment trust on this website: www.latamincome.co.uk