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LV= realistic target

LV= Asset Management

LVAM UK Equity Income Fund


Aim: To achieve a high level of income combined with long-term capital growth

Minimum investment: Lump sum £1,000 and additional top ups £500, regular £100 per month

Benchmark: The fund will site in the IMA UK Equity Income Sector, defined as: Funds which invest at least 80% in equities and which aim to achieve a yield on the distributable income in excess of 110% of the FTSE All Share yield

Isa link: Yes

Charges: Initial 5%, annual management charge 1% and 2% switching charge

Commission: Initial up to 4% and/or renewal 0.5%

Tel: 020 7634 4200


The objective of this fund is to target a high level of income as well as long-term capital growth, and it will invest principally in UK equities.

Informed Choice chartered financial planner Martin Bamford says the fund comes at a time when interest rates have fallen substantially and investors are searching for income. It is able to employ derivative plays to generate income and Bamford believes fund manager Chris Price has set himself a realistic income target of 5 per cent against the backdrop of falling rates.

Bamford says LV= Asset Management has a small range of funds and a reasonably cautious strategy. Income distributions are only made half yearly, which he says may discourage investors seeking a natural distribution of income. Also, as a new retail fund, Bamford believes many investors and their advisers will choose to see a year or more of performance before investing.

Bamford says the fund has no formal benchmark, although comparisons will be made to the average performance of the IMA UK Equity Income sector. The internal mandate for the fund performed in line with the performance of the FTSE All-Share in the second half of 2008.

LV= can draw on the experience of John Hampton for the fixed interest part of the portfolio. Bamford says: “Hampton has delivered credible performance for his own fixed interest fund”. He find the annual management charge reasonable at 1 per cent and additional expenses take the fund up to a 1.25 per cent total expense ratio.


Suitability to market: Good
Investment strategy: Good
Charges: Good
Adviser remuneration: Good

Overall 8/10


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