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Mid cap managers dominate large caps at top of UK equity income tables
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by Drazen Jorgic on Oct 21, 2010 at 00:01
Fund managers focusing outside the FTSE 100 have rewarded investors with the best returns within the UK equity income sector over the past 12 months, research by Citywire Wealth Manager has revealed.
Although the sector has become synonymous with large cap focused investors, such as Neil Woodford of Invesco Perpetual and PSigma’s Bill Mott, the big name fund managers that dominate the best sellers list in the UK equity income sector are notable for their absence from the top of the performance charts.
Indeed, the two leading funds over the past 12 months were small and mid cap specialists. Within the top five, one is an ethical fund and another a fund of investment trusts – so not the usual suspects
Most of the top performing managers over the past year were also bullish about the markets, with some citing expected economic improvement while others refer to another bout of quantitative easing (QE) as the reason behind their stance.
Citywire A-rated John McLure, manager of the Unicorn UK Income fund , and Chelverton UK Equity Income pair David Horner and David Taylor were the top performers over the past 12 months. Both funds have a bias towards small and mid caps.
McLure believes the demise of the banks during the credit crunch, as well as the BP dividend cut, has exposed clustering among funds that focus exclusively on FTSE 100 stocks. He says: ‘The reality of dividend payment by large stocks has been questioned significantly now.’
Having returned 21.3% over the 12 months to the end of August, McLure tops the table of 103 funds. During this period the average UK equity income manager returned only 8.8%. McLure is also the best performing fund manager over three years, having returned 9.1% during a period when the average manager lost 11.2%.
It is only over five years that his Unicorn fund does not top the ranking, with Invesco Perpetual Income Inc and High Income fund manager Woodford demonstrating his impressive long-term track record.
McLure is downbeat on the UK economy but bullish about the markets. He says: ‘We are pretty bullish about everything. We are positioned very much in international-based companies and export-type stocks.
More about this:
Look up the funds
- Unicorn UK Income A Inc
- Chelverton UK Equity Income Ret Inc
- Invesco Perpetual Income Inc
- Invesco Perpetual High Income Inc
- Henderson UK Strategic Income
- CF Walker Crips Equity Income Acc
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