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Frikkee says performance vindicates defensive positioning

Newton UK higher income fund manager Tineke Frikkee believes her decision to hold defensive FTSE 100 positions is starting to bear fruit.

She has held stocks such as BP, Vodafone and British American Tobacco as she looks for a yield of around 6 per cent. Her fund has lost 17.4 per cent in the last 12 months, making it third quartile in the IMA’s UK equity income sector, but Frikkee says the past three months have seen a turn-round in performance.

Frikkee says performance suffered due to her decision to steer clear of mining stocks.

She says: “We have focused on dividend-yielding stocks and that is something the mining sector does not really have. The sector keeps producing but it is one that is becoming more volatile. I do not think the mining sector will fall away but I think there are tougher times ahead.”

Other UK income managers such as Jupiter’s Tony Nutt have seen returns suffer after pulling out of the mining sector early.

Frikkee says: “Prospects are looking good, having almost produced top-quartile performance in the past three months, with mining yet to fall away.”

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