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This fund targets an above average yield and some capital growth from a multi-cap portfolio of UK equities. The investment process, which incorporates a strict yield requirement for portfolio holdings, was developed by fund managers James Lowen and Clive Beagles at previous employers Newton. Stock selection also incorporates long-term investment trends identified by the managers - these are used to focus research. The portfolio typically has a value bias.
|Sector||UK Equity Income|
|Dividends paid||28 Feb, 31 May, 31 Aug, 30 Nov|
|Standard initial charge||0.00%|
|Initial charge via Bestinvest||0.00%|
|Additional bid/offer spread||0.00%|
|Annual management charge||0.63%|
|Ongoing charges figure||0.67%|
There is a 15% performance fee on any outperformance of the benchmark (FTSE All-Share).
Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Information Investor Document, which we make available to you before you make a decision to invest, alternatively it is available on request.
Beagles and Lowen each have more than 20 years’ experience and have worked together for more than a decade, during which time they have generated fairly consistent outperformance. This is partly due to a higher weighting to mid and small-cap companies than the peer group, which often looks at just a limited number of large cap dividend payers. The fund’s success has resulted in an increase in assets under management, which may make it more difficult to access smaller companies, providing a headwind to future performance. The fund has also typically been more volatile than the benchmark and peer group, and can struggle when its value style is out of favour.
|High yield bonds||0|
All stocks in the portfolio must have a higher prospective yield than the FTSE All-Share, which reduces the investment universe to around 120-140 FTSE 350 companies and 80+ small cap stocks. The managers make their own dividend forecasts, so they can invest in non-yielding stocks they believe will introduce dividends. The managers build the portfolio using a primarily bottom-up approach, favouring companies with strong cash and dividend flows. Stock turnover is relatively low (around 50%pa) - any stock whose yield falls below that of the index will be sold; the managers may also sell companies yielding more than the index if other valuation measures become stretched. The process also includes themes - long term trends such as the mobile internet - identified by the managers to focus research. Portfolio construction is also mainly bottom-up and sector weights can diverge substantially from the index, though the managers sometimes include stocks in sectors they do not like in order to reduce underweights.
|Fund data updated on||25/05/18|
|High yield bonds||0|
As at: 31/03/2018
9.0562%Royal Dutch Shell
4.8564%Lloyds Banking Group Plc
4.0278%Vodafone Group Plc
|Oil & Gas||17%|
Maximum position size 10% - there are no other stock limits, but stock overweights are unlikely to exceed 3%. There are no sector limits.
There are some limits placed on the portfolio but these could result in significant divergences from the benchmark from time to time.
|Average monthly relative returns||Bestinvest MRI|
|13/14||14/15||15/16||16/17||17/18||3 years||5 years||Career||3 years||5 years||Career|
|Performance figures are based on the average of monthly percentage returns relative to the benchmark index.|
Lowen started his career in 1994 at KPMG, qualifying as a Chartered Accountant before moving to Newton in 1998 as a member of the Research Department. He became an Investment Director, a member of the UK Policy Group (responsible for setting UK equity strategy) and the investment committee before moving to JO Hambro in September 2004. Lowen holds a first class Economics degree from Exeter University and is an associate member of the Institute of Investment Management and Research. Beagles graduated in 1989 with a degree in Economics from Nottingham University and began his investment career at Commercial Union in the UK Equity team. After 7 years at CU, culminating in the management of their pooled pension fund, he joined Newton in September 1996 as a Regional Specialist, UK Equities. He ultimately became Head of UK Equities and chaired the UK Equity Policy group, before joining JO Hambro in September 2004.
James Lowen / Clive Beagles has 10.1 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.34%. During the worst period of relative performance (from June 2015 - July 2016) there was a decline of 10% relative to the index. The worst absolute loss has been 28%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.
|Periods of worst performance|
|Absolute||-28% (April 2008 - February 2009)|
|Relative||-10% (June 2015 - July 2016)|
Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.