Also, while UK equity income funds are a little more risky than bond funds, they have always outperformed over periods of 10 years or more.Over the five years to January 15, 2006 – when growth funds showed a return of 8.1 per cent and income funds 32 per cent – the average bond fund did outperform but by less than 1 per cent. Over 10 years, UK equity income funds outperformed growth funds by over 44 per cent points and bond funds by over 47 per cent. UK equity income funds are also much less volatile than growth funds and are likely to show a rising income over the years as dividends increase. Corporate UK continues to offer good conditions, including stable inflation and interest rates, and a resurgence in merger and acquisition activity is driving dividends up. The outstanding managers in this sector are Neil Woodford of Invesco Perpetual, whose high income and income funds have performed exceptionally well, both being up over 68 per cent over five years, and George Luckraft, who runs Framlington’s equity income and monthly income funds. Anthony Nutt of Jupiter income has also scored consistently well, as has Karen Robertson, who manages Standard Life Investments’ UK equity high income fund. One oddity in this sector, being very high risk, is New Star’s strategic income fund, which invests mainly in the income shares and zeros of investment trusts. Over the past three years, the fund has shown returns of 150 per cent. However, while Paul Craig is an excellent manager, this trust is only for gamblers.
In the fund management department of Hargreaves Lansdown we believe there are three drivers to equity fund performance – size bias, style bias, manager’s stockpicking abilityBy size, we are considering the fund’s exposure to small companies, mid-sized companies and large companies. By style, we are talking about the fund’s exposure to high-yielding stocks or lower yielding stocks.
Further to Martin Blackie’s letter in last week’s Money Marketing about his recent unfortunate experience with Fidelity International, let me first say how sorry we are that he has has not received the standard of service which he should rightly expect from Fidelity. Second, let me say that we take such incidents extremely seriously. On […]
The Revenue has lifted a tax threat facing Standard Life policyholders. A-Day rule changes would have meant with-profits pension clients being taxed immediately at 40 per cent on their demutualisation windfalls, even for members who are lower-rate or nil- rate taxpayers. Standard lobbied HMRC after spotting the anomaly and the Revenue has set out draft […]
Conservative MPs say that problems over the funding of advice and the regulatory framework of the NPSS need to be addressed if consensus is to be reached on pension reform. Speaking ahead of a Parliamentary debate on pensions, Tory Shadow minister for work and pensions Nigel Waterson says Turner’s recommendation for an advice-free NPSS model […]
By Fiona Tait, Pension Specialist Royal London firmly believes in the value delivered to clients by financial advisers, not just for one-off events but on an ongoing basis. This is a position we continue to hold in our consultation responses and external communications while always questioning whether there are ways in which we can help […]
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Offsetting the cost of advice this way would benefit clients and advisers alike One of the multiple barriers to better take-up of financial advice is that some people are unwilling or unable to meet the upfront cost. In response to this, the government has allowed people to take small chunks (three lots of £500) out […]
Fund managers like to trade off having a unique style. There thousands of funds out there to choose from – the question I often hear from advisers is: what makes this person different? Sometimes this can be a really tough one to answer. “We invest for the long term” is all fine and good, but […]
With rising costs and an increasingly tough regulatory market more advisers are looking to outsource their investment proposition, with many leaning towards discretionary fund managers. But while the number of advisers using DFMs is on the up, overall satisfaction with them has dipped. According to a recent survey by financial information firm Defaqto, 74 per […]