JO HAMBRO CAPITAL MANAGEMENTJOHCM UK Equity Income FundType: OeicAim: Income and growth by investing in UK equities listed mainly on the FTSE 350 indexMinimum investment: Lump sum £1,000Investment split: 100% in UK equitiesIsa link: YesPep transfers: YesCharges: Initial up to 5%, annual 1.25%, performance fee 15%Commission: Initial 3%, renewal 0.5%Tel: 020 7747 5678The equity income fund is an Oeic that aims to achieve above average dividend yield through an actively managed portfolio of 50-70 stocks.
Charter Devon Law principal Michael Posner says: “JO Hambro Capital Management managed to lure Clive Beagles away from Newton, where he managed the top-quartile higher-income fund. As a result, it is launching the new equity income fund to make use of his undoubted skills in this sector.”
Posner feels the firm’s proven record of accomplishment will enhance the appeal of this fund as a ground floor opportunity to invest in a clean UK income fund. He says: “With historically low yields in fixed income and a gradual return to the markets by wary investors, the prospects for this fund succeeding are relatively good.”
Posner likes the performance fee because it is an incentive for Beagles to get his sums right. “The fund will adopt an inevitable contrarian style and if any of the stocks held falls below the FTSE average, it will be replaced,” he says.
Casting an eye over the product literature, Posner says: “The literature is well written, with sufficient clarity to enable this to be useful in presenting the details to clients. JO Hambro advises that it has secured the loyalty of the fund managers by generous terms but, no doubt, Newton thought the same.”
Turning his attention to potential drawbacks, Posner says: “There is very little to dislike about this offering, which has been brought to the market as we begin to see some signs of a tenuous revival. Although with oil prices rising and the dollar in apparent freefall, it would be a very brave or foolhardy investor who resolved that equity investment was anything other than a higher-risk road to future riches. However, the higher-yielding stocks tend to be among the safer companies in the FTSE 350 index so that does counterbalance some of the risk.”
Posner concludes: “This is a new offering from a reputable investment group by a fund manager with proven ability and it will stand on its own merits for that.”
BROKER RATINGSSuitability to market GoodInvestment strategy GoodCharges AverageAdviser remuneration AverageOverall 8/10