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Unicorn leads income funds as Schroder blacklisted

Unicorn UK Income fund tops Sanlam report of equity income funds while Schroder Income Maximiser falls to the 'Black List'.

 

by Sean Butters on Feb 01, 2016 at 09:54

Unicorn leads income funds as Schroder blacklisted

The Unicorn UK Income fund has taken top spot in the bi-annual study of equity income funds run by Sanlam Private Wealth.  

The London-based investment arm of Sanlam, a South African financial services group, ranks equity income funds based on the income they have generated over the last five calendar years, capital growth for each of the past 12-months periods and the volatility of returns over the last five years. Funds are then categorised into White, Grey and Black lists.

The Unicorn UK Income fund, co-managed by Citywire AA-rated Simon Moon and A-rated Fraser Mackersie, delivered a total income of 26.5% over the five years to December 2015 at a volatility of 2.7%, with a total return of 13.3% in 2015.

This was followed by PFS Chelverton UK Equity Income  managed by Citywire AAA-rated David Taylor. It took second spot on a net income of 31.7% over the last five years and a volatility of 2.9%. The fund returned 16% in 2015.

'Both funds focus on mid-sized and smaller companies, which has helped them outperform their mostly larger company focused peer group. In addition to benefiting from the smaller company tailwind, both funds are in the top quartile of the Study for income generated over the five-year period,' the report's author Charles Brand said.

The highest climber moving into the White List was Michael Clark’s Fidelity Moneybuilder Dividend fund, which unlike many other top performers is not biased to medium-sized and smaller companies.

Other notable moves in the White List included Troy's Trojan Income fund, managed by Citywire AAA-rated Francis Brooke, which established itself in the top half of the list.

Meanwhile the Miton Income fund and the Santander Equity Income fund, managed by AA-rated Gervais Williams an AA-rated Stephen Payne, were new entrants in the White List.  

White List demotions

Citywire AAA-rated Stephen Message’s Old Mutual UK Equity Income and AA-rated Clive Beagles’ JOHCM UK Equity Income were among the White List casualties.

Message's fund has registered a net income of 24.8% over the last five years at a volatility of 3.7. In 2015 it returned 3.4%. Meanwhile Beagles' fund is on a net income of 25.8% over the last five years at a volatility of 3.5 and returned 0.5% in 2015.   

Both funds fell dramatically to the bottom half of the Grey List after their first poor years since 2011. 'Interestingly, despite the two funds underperforming the UK Equity Income sector over the year, both outperformed the broader UK equity market, demonstrating the resilience that the sector can provide,' said Brand. 

The Black List

At the top of the Black List was Schroder Income Maximiser  managed by Thomas See. Its 8.4% yield in 2015 could not offset total return loss of 6.9% for the year.

'Although it generated the highest yield of any fund in the study, the Schroder Income Maximiser fund sits top of the Black List, having performed amongst the worst in the Income Study in 2015,' Brand said.

Mark Wharrier's BlackRock UK Income fund also sits in the Black List, although Brand noted an improvement in its performance.

'Despite continued improved performance under Mark Wharrier, the BlackRock UK Income fund has again not quite escaped the Black List, though the manager is now in a good position to take his fund out of the bottom fourteen if he continues to perform,' Brand said.

Overall Brand said income fund managers had fared well in tough market conditions. 'It is worth noting that, despite the large changes in dividends paid out by companies, the UK Equity Income sector outperformed both the UK equity market and the UK Equity All Companies sector in 2015.'

But he cautioned: 'Investors seeking income from the stock market in 2016 must be sure to consider not only headline yields, but also the sustainability of dividends. The price volatility that we highlighted in our mid-year review has continued, adding to the challenge of finding suitable stocks.'  

5 comments so far. Why not have your say?

ROGER HULME

Feb 01, 2016 at 18:02

Pity that you didn't compare Acorn Income Fund AIF with Unicorn UK Income run by the same Managers. I hold the former as it has performed better in the past.

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Alan Selwood

Feb 01, 2016 at 23:18

To be really useful, the survey should cover all OEICs, unit trusts and investment trusts, given that investment trusts frequently outperform the others.

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Hugh M

Feb 02, 2016 at 03:30

Can somebody please explain this to me, maybe I'm being a bit thick.

Unicorn Income Total return in 2015 13.3%.

However, over 1 year return +5.3%, and yield +3.91%.

5.3+3.91=9.21%

From where cometh 13.3%?

Similar maths apply to the Chelverton fund.

I assume that I'm missing something but I don't know what.

report this

Weegie wean

Feb 06, 2016 at 21:39

Well Sean, what is it that Hugh M is missing?

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Anonymous 1 needed this 'off the record'

Feb 07, 2016 at 15:40

Sadly, I'm often unable to replicate quoted figures for performance and would appreciate an explanation of how they are arrived at. Using HL's performance tool, when trying to compare 'Acc' and 'Income' units in the same fund, they come out different, even though all figures are supposed to be with income re-invested.

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  • Old Mutual UK Equity Income A Acc
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  • Fidelity MoneyBuilder Dividend
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  • Artemis Income R Inc
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  • Newton UK Income GBP Inc
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  • Unicorn UK Income A Inc
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  • Standard Life Inv UK Equity Inc Unconstr Ret Acc
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  • Miton Income R Acc
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  • Santander Equity Income Ret Inc
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  • Premier Monthly Income A Inc
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  • Evenlode Income A Acc
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  • Trojan Income O Acc
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  • BlackRock UK Income A Inc
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  • Schroder Income Maximiser A Acc
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  • Allianz UK Equity Income A Inc
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Look up the fund managers

  • Stephen Message
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  • Clive Beagles
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  • Michael Clark
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  • Adrian Frost
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  • Adrian Gosden
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  • Christopher Metcalfe
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  • Simon Moon
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  • Fraser Mackersie
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  • Thomas Moore
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  • Eric Moore
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  • Gervais Williams
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  • Stephen Payne
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  • Chris White
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  • Hugh Yarrow
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  • Francis Brooke
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  • Adam Avigdori
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  • Mark Wharrier
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  • Thomas See
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  • Simon Gergel
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  • Karen Robertson
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