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Majedie unleashes top performing UK equity income fund
by Dylan Lobo on Jan 28, 2013 at 11:31
Majedie Asset Management has opened up a top performing UK equity income fund to the wider market, Wealth Manager can reveal.
Chris Reid (pictured) has been running the Majedie UK Income fund behind closed doors after the boutique seeded the strategy with £10 million back in December 2011.
According to the group, the fund has returned 19.9% since its inception, outstripping the 15.3% return on the FTSE All Share (TR) Index over the same stretch.
This performance has convinced the group to launch the fund into the market to enhance its UK equity proposition.
Majedie chief executive Rob Harris told Wealth Manager: 'UK equity income has been a gap on our roster. We would never launch a fund to investors unless we have conviction that it can perform well and has a sufficiently distinctive approach. Equity income is an area we have considered for some time; we are now confident we have the skills in place to make a proper success of it.'
The fund, which yielded 4.6% in 2012, combines capital appreciation with income in a bid to maximise the total return for investors.
'This is not a run of the mill income fund,' Harris said, adding it has delivered this performance by adopting a 'distinct' approach and shying away from the usual suspects – companies with a high yield but often limited growth prospects.
'Instead [we are] looking for future money makers that may be hidden from view,' he said.
The process
Reid, who joined Majedie in 2008, said: 'The UK Income fund is fundamentally a stock picking fund. The process is simple – we are looking for cheap companies that are changing for the better and will deliver appropriate levels of income while this change takes place.
'You may not see the typical high yield stocks in this portfolio. We currently hold a good mix of cyclicals with strong balance sheets, paying a decent yield, and undervalued defensives that could re-rate.
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