The details of the fund were sent to the Financial Services Authority just over a month ago and a spokesman confirmed that approval is expected within the next few weeks.

The new fund, the first for long only specialist Russ since the Argonaut European Income Fund was launched in December 2005, will have the ability to use, among other tools, covered call options. Ignis as a house is noted for its long only investment skills, as is Russ, with JP Morgan expected to be working with Russ in making these overlay decisions.

There are other questions over the mechanics behind the covered call overlay.

Gavin Haynes, investment director at Whitechurch Securities, says: "We believe in the concept of sacrificing some capital growth for enhancing the yield, there are some attractive yield opportunities in Europe and Olly Russ is a good equity income manager. Without having the full details I would like to see how they are going to apply [the overlay] and see what the cost of the enhanced income is. How much of the capital growth is sacrificed in European stocks at the moment?"

Darius McDermott, managing director at Chelsea Financial Services, is another fan of Olly Russ as a stock-picker and a fund manager and would also ask how tactical the overlay is likely to be, whether it will be applied to every stock or only, say, the small and mid cap firms.

According to the factsheet for Russ's current £425m Argonaut European Income Fund it is benchmarked against the MSCI Europe ex UK and fares poorly by comparison. It has returned 16.2% over the past year (to the end of January) and 16.8% since launch just over four years ago, compared with 29.7% and 21.9% over the same time periods from the MSCI Europe ex UK.

Perhaps more accurately, the fund should be seen as an income fund and compared directly with other other income funds as a result although there is no separate IMA non-UK equity income sector, something that Russ has been actively campaigning to change.

Explaining the performance, a spokesperson said: "The fund has suffered over the last year due to the ‘dash to trash’. From March 2009 European equities saw their sharpest ever rise as this dash to trash resulted in companies that demonstrated strong cashflow and paying high dividends being left behind in the rally."

There are currently 11 European equity income funds in the Europe ex UK sector, with Argonaut European Income having the longest track record. On comparing income paid, the Argonaut fund has paid the greatest income in the sector over one, two, three and four years and since launch.