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This fund targets income (target yield is 15% above that of the benchmark) and some capital growth through investment in large and mid-cap continental European equities. Manager Will James forms the core of the portfolio (around 50%) from High Dividend stocks with premium, sustainable yields. He supplements this with around 35% invested in Dividend Growth stocks, with lower yields but fast dividend and capital growth, and a further 15% in Dividend Upgrade stocks, where dividend capacity is significantly underappreciated by the market. The portfolio typically has a slight bias to growth and away from value.
|Sector||Europe Excluding UK|
|Dividends paid||31 Jan, 30 Apr, 31 Jul, 31 Oct|
|Standard initial charge||0.00%|
|Initial charge via Bestinvest||0.00%|
|Additional bid/offer spread||0.00%|
|Annual management charge||0.75%|
|Ongoing charges figure||0.85%|
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 Investor Information Document, which we make available to you before you make a decision to invest, alternatively it is available on request.
Despite the attractive dividends available from European companies, there are surprisingly few managers running income funds, and fewer still with good track records. Will James is one such manager. We have been impressed by James' stock knowledge on the numerous times that we have met him, and this knowledge is matched by this fund’s performance. As well as paying out a healthy yield, he has also delivered benchmark-beating total returns. These returns have typically been combined with lower volatility than the index, making the fund a more defensive option in the sector. It typically provides a degree of protection from falling markets, though has frequently lagged in rising markets.
|High yield bonds||0|
The fund is run using Standard Life’s "Focus on Change" investment philosophy and largely focuses on stockpicking rather than macro conditions. It feeds off Standard Life’s analysts, who reduce a universe of over 600 stocks to around 100 buy recommendations with the high conviction Winners List of 20 stocks a prominent source of ideas. However, James has a focus on yielding stocks and to this end may invest in some stocks that are not buy rated by the analysts. He splits the portfolio into three types of company: - High Dividend (around 50% of portfolio). Companies that have a good track record of paying a healthy and growing dividend to investors where James feels that this is going to continue. - Dividend Growth (around 35%). Companies delivering rapid dividend growth, where James believes this is sustainable. - Dividend Upgrade (around 15%). Stocks where James believes dividend-paying capacity is mispriced, either because they can surprise with a larger than expected dividend or can avoid an expected dividend cut. Understanding a company’s dividend policy is key, and the team spends a fair amount of its time researching and meeting companies to judge this.
|Fund data updated on||21/07/17|
|High yield bonds||0|
As at: 31/05/2017
3.2% Roche Hldg Ag
3% Danske Bank A/S
3% Siemens Ag
2.9% Nordea Bank Ab
2.8% Total Sa
2.6% Enel Spa
2.6% Nokia Corp
2.4% Anheuser-Busch Inbev Sa/Nv
2.4% Partners Group Holding
2.3% Swedbank Ab
40-70 stocks. The fund may also invest in convertibles.
Stock weights must be within +/-5% of index, country weights +/-15% and sector weights +/-15%. Max 20% in convertibles, fixed interest and cash. VP 07.30.
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|
|12/13||13/14||14/15||15/16||16/17||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.|
James has been an Investment Director on Standard Life's European desk since 2007. He also covers the IT Hardware, Banks and General Retail sectors as an analyst. He began his investment career at Adam and Company in 2002, where he ran a global fund and attained a Citywire AA rating. Previously James was in the British Army, serving as an officer in the 1st Battalion The Argyll and Sutherland Highlanders. He graduated from Edinburgh University, he holds the IMC, Securities Institute Diploma and is a CFA charter holder.
Will James has 8.2 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.05%. During the worst period of relative performance (from May 2012 - April 2014) there was a decline of 8% relative to the index. The worst absolute loss has been 18%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 79%.
|Periods of worst performance|
|Absolute||-18% (April 2011 - September 2011)|
|Relative||-8% (May 2012 - April 2014)|
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.