In an ever-changing and uncertain world where investors are increasingly looking for better returns, a top asset management firm is set to launch a new fund offering attractive levels of income and potential capital growth.LOM Asset Management Ltd yesterday announced the launch of its LOM Stable Income Fund SP on July 22, which will pay out a monthly annualised dividend of 3.6 percent during 2011 and offer income yield of 5.1 percent gross of management fees as well as potential capital growth targeting a five percent plus total net return.Bryan Dooley, portfolio manager with LOM Asset Management Ltd, said that the new fund offered a viable alternative place to put your money providing both a good rate of return and minimising the risk.“Recently, we’ve found that two of the greatest concerns for clients are minimising market volatility and generating a reasonable level of income and growth in a world of diminishing returns on bonds and money market accounts,” he said.“As a local institution with a strong portfolio management team we designed a unique investment solution which we believe will help our clients to achieve both of these goals.”The fund invests in a combination of common stock, preferred stock shares, high-dividend-paying equities and select bonds with a target market for clients seeking current income and/or greater returns than money market funds and short-term bonds with much lower expected volatility than the equity markets.It compares favourably with returns from other asset classes, including five-year US Treasuries which offered a yield of 1.76 percent on June 30, 2011, 10-year US Treasuries yielding at 3.16 percent as of June 30, 2011 and Standard & Poor’s 500 average yield of 1.93 percent.“It’s almost a product that created itself,” said Mr Dooley. “Everybody is searching for income but they don’t want to take on huge amounts of risk so we have used some asset allocation techniques and strategies and put that all together to provide what we believe is a stable income vehicle.”Mr Dooley said that LOM had selected good quality preference shares that act as a fixed income investment hedging against volatility and inflation and high paying stocks to boost returns on the upside.Grant Hopkins, portfolio manager at LOM Asset Management, said that the demand stemmed from investors looking for a higher yield in a low interest rate environment with bank deposits and stock dividends offering little in that respect and LOM was looking to fill a niche in the market.Mr Hopkins anticipated that the dividend would range from 3.5 percent to four percent in the future, with the rate being reviewed on an annual basis, with no fixed investment term or redemption fees.Turning to the future of the investment market, Mr Dooley said that said that steadily declining interest rates since the credit crisis of 2007 and the US Federal Reserve’s decision to hold short-term rates close to zero for an extended period of time hit investors hard, but there were some less popular and less understood sectors where significantly better returns could be found.He said that the latest economic data pointed to a slow and bumpy recovery with many of the world’s largest economies taking on too much debt, particularly in light of the Greek financial crisis and its knock-on effect on the Eurozone, with some governments moving forward with austerity cuts in a bid to reduce their budgets.Forecasting growth of two to three percent, Mr Dooley said he did not expect to see a rise in interest rates until the next US election, while he viewed emerging countries such as China and Brasil as leading the recovery, adding that they alone would not be enough to carry the rest of the global economy, as investors were prepared to take greater risks.