The Chelverton UK Equity Income fund has taken top spot in the Sanlam Private Wealth income study, while established funds run by Jupiter and Newton have been blacklisted.
The bi-annual study ranks equity income funds in white, grey and black lists on seven different criteria based on performance, volatility and income distributed over a five-year period. The most recent period is given greater weighting.
The Chelverton UK Equity Income fund, co-managed by Citywire AAA-rated pair David Horner (pictured) and David Taylor, has delivered a total return of 10.7% in the 12 months to the end of June. Its net income in the five years to the end of June stood at 36.5% with a volatility of 3.1, which is respectable given the fund primarily invests on mid and small cap stocks.
‘This [Chelverton] fund has benefitted from focusing on mid and smaller capitalisation companies, which have outperformed the wider market, while FTSE 100 companies have been the clear laggards in 2015.’
Ben Whitmore replaced Anthony Nutt as manager of the £2 billion Jupiter Income fund at the start of 2013. In the last 12 months the fund has returned 5.3%, while its net income over the last five years was well behind the White List leaders at 25.4%
The £1.8 billion Newton UK Income fund, run by Ben Metcalfe, has disappointed in performance terms recently, returning just 4% over the last 12 months. However, its 29.7% income over the last five years remains relatively high.
Meanwhile the revival of mid and small caps was of detriment to previous White List leader, Royal London UK Equity Income, although AAA-rated Martin Cholwill’s fund retains a podium spot in third after a return of 6.5% over the last 12 months.
‘Martin Cholwill manages the fund investing across the UK capitalisation spectrum with a focus on cash flow,’ Brand said. [But] the resurgence of mid and smaller capitalisation companies during the first half of 2015 has meant that funds focused on that segment have moved to the top of the White List.’
There was also good news for Citywire AAA-rated pair Clive Beagles and James Lowen, whose JOHCM UK Equity Income fund was back on the 14-strong White List. ‘The fund suffered towards the end of 2014 with its energy and exposures in the face of the declining oil price,’ Brand explained. ‘[But] with the stabilisation of the commodity, the headwinds for this strategy have largely been removed.
These new entrants replaced the Evenlode Income, Fidelity Money Builder Dividend and AXA Framlington Monthly Income funds, which slipped back into the Grey List.
The Scottish Widows UK Equity Income found itself propping the sector at the bottom of the Black List following a disappointing return of just 2.4% in the last 12 months.
‘This [return] emphasises the overall positive equity market environment experienced over this period and by the UK equity income sector in general.’ Brand commented.