A guided tour of Sanlam's controversial Income Study
Whiter than white
Unicorn UK Income
has been bumped up onto the White List this year with its managers, Citywire AA-rated Unicorn UK Income John McClure and A-rated Christopher Hutchinson, praised for standing out from the equity income crowd with a larger than average proportion of smaller companies and an attractive level of income.
The fund returned a net income of £20.40 on an £100 investment over five years, and ranks top of the list in the Citywire UK Equity Income sector for total returns over three and five years.
Premier Monthly Income
Another new entrant on the White List, the
fund made the grade after producing a net income of £22.40 on an £100 investment over five years. Premier Monthly Income
Sanlam gave the fund a ‘hold’ rating, and singled out manager
Christopher White for praise saying he had ‘steadied the ship’.
Rathbone Blue Chip Income & Growth fund
Another new kid on the block, or rather the White List, the
received a ‘hold’ recommendation having returned 17.1% over five years versus the FTSE All Share’s 13.2%. Rathbone Blue Chip Income & Growth fund
The study gave credit to managers, Citywire A-rated
Julian Chillingworth and AA-rated Alan Dobbie, for their use of a broad number of assets for capital growth and income.
Schroder Income Maximiser
fund has made it back onto the White List despite a period weaker performance in 2010 and 2011. The Schroder Income Maximiser
Sanlam said Citywire A-rated manager
Thomas See had successfully used a derivative overlay to enhance income for investors and received a ‘buy’ recommendation.
The fund has returned a net income of £30.60 on £100 over five years, and ranks top of the White List in this category.
Shades of Grey
Invesco Perpetual High Income
The most high profile name on the Grey List,
Neil Woodford’s demotion from the White List has grabbed all the headlines.
The star manager’s
fund has dropped to the Grey List with Sanlam giving the £12 billion fund a ‘sell’ recommendation arguing that its size meant it was less able to be nimble and react quickly to changing markets. Invesco Perpetual High Income
Sanlam also recommended investors ‘sell’ Woodford’s £9.2 billion
Invesco Perpetual Income fund due to its large size and its focus on large cap, defensive stocks, predominantly in health care and consumer goods.
‘We would prefer managers who are able to be more pragmatic in the face of swiftly changing circumstances,’ it said.
In response Invesco Perpetual told (i)Wealth Manager(/i): 'Neil Woodford has been generating exceptional returns for his investors for over 20 years, through varying market conditions. His portfolio is intentionally focused towards dependable, undervalued companies which he is confident will generate attractive returns over the long term.'
Threadneedle Monthly Income
Woodford was hardly alone moving down from bright white to shades of grey with Citywire A-rated manager
Jonathan Barber and his fund also dropping down. Threadneedle Monthly Income
The downgrade comes despite the fund returning 16.3% over five years beating both the FTSE All Share’s 13.2% and the FTSE 350 Higher Yield’s 5.6% over the same timeframe.
Fidelity MoneyBuilder Dividend
Also fading to grey was the
fund, run by Citywire A-rated manager Fidelity MoneyBuilder Dividend Michael Clark.
Threadneedle Monthly Income fund the Fidelity MoneyBuilder Dividend fund beat the FTSE All Share and FTSE 350 Higher Yield over five years, returning a net income £20.80 on a £100 investment over the same period.
Henderson UK Equity Income
But being on the Grey List is not all bad news, or rather not if the fund was previously on the Black List.
One fund making the move upwards was the
fund which is run by Citywire AAA-rated manager Henderson UK Equity Income James Henderson.
The £349 million fund has returned a net income of £15.40 on a £100 investment over five years, the lowest on the Grey List.
However, Henderson has returned 16.4% over five years, beating both the FTSE All Share and FTSE 350 Higher Yield by a comfortable margin.
Also moving up was the
fund which was previously on the Black List. Liontrust Income
Citywire A-rated managers
James Inglis-Jones and Gary West produced a net income of £21.20 on a £100 investment over five years, but have undershot the FTSE All Share’s 13.2%, returning 8.9% over the same period.
Sanlam said: ‘With the team approaching their four year anniversary on the fund, their cash flow investment philosophy is bearing fruit. Having moved out of the Black List, we expect big things of the team here’
Ignis UK Equity Income
fund was also promoted onto the Grey List. The fund is run by Ignis UK Equity Income Graham Ashby and returned a net income of £17.50 on a £100 investment over five years. Over the same period the fund delivered 7.7% compared to the FTSE All Share’s 13.2%.
Into the Black
And so to the Black List…..
Jupiter Income Trust
Anthony Nutt is soon to retire from his fourteen year tenure on the and Sanlam has therefore given the fund a ‘sell’ recommendation but advised investors to keep an eye on the transition of its management to Ben Whitmore. Jupiter Income Trust
Sanlam said the £1.9 billion fund had been a regulator on the White List for many years but has suffered weaker performance recently delivering 0.1% over five years, compared to the FTSE All Share’s 13.2%.
Insight Investment Equity High
Keeping questionable company with the
Jupiter Income Trust was the fund which also dropped to the Black List in 2013. Insight Investment Equity High
The study said that Citywire A-rated
Timothy Rees has returned a net income of £17 on a £100 investment over five years.
Woodford was not the only star name to fall from grace in this year’s study as
Robin Geffen’s fund slipped from the Grey List to the Black. Neptune Income
The £202 million fund has returned 10% over five years, beating the FTSE 350 Higher Yield’s 5.6% but falling short of the FTSE All Share’s 13.2%.
fund has hit the Black List having delivered a net income of £17.70 since the end of 2007 on a £100 investment. PSigma Income
Bill Mott’s £387 million fund is mostly invested in UK listed large cap stocks such as GlaxoSmithKline, Royal Dutch Shell and Vodafone.
CF Canlife UK Equity Income
Also down to this year’s Black List is the
fund. CF Canlife UK Equity Income
The £79 million fund is managed by
Craig Rippe and returned a net income of £16.90 on an £100 investment over five years.