View more on these topics

New Star values high income

New Star has unleashed its fourth fund, the New Star higher income fund, in time for the Isa season.

The fund aims to produce a rising level of income and capital growth by investing mainly in UK companies, using the FTSE All Share as its benchmark index. It is expected to contain between 55 and 75 stocks and can invest in ordinary shares, fixed-interest securities, preference shares and convertibles.

Toby Thompson, who joined New Star in 2001 from Newton Investment Management, will manage the fund. He was responsible for the Newton higher income fund between April 1, 1996, and July 2, 2001. This fund was ranked 3 out of 76 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested during Thompson&#39s tenure, according to Standard & Poor&#39s,

Thompson will run the New Star fund in a similar style to the way he managed the Newton fund. He will buy shares when the companies are out of favour and their yields are high, then sell them when they are back in favour and their yields have fallen.

To generate a high yield, Thompson will only buy companies with yields that are at least 20 per cent higher than the yield on the benchmark, which could isolate more stocks than he needs. To narrow the options down further, he will look at cash flow, management and business strategies and potential earnings.

Investors looking for income at a time when interest rates are low could be attracted to this fund, especially as the income is set to increase as time goes on. But much depends on Thompson&#39s ability to transfer his successful stockpicking style from Newton to New Star.

According to Standard & Poor&#39s, the New Star UK growth fund is ranked 46 out of 297 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested on a bid-to-bid basis with net income reinvested over six months to January 21, 2002.

Recommended

Carry on, cowboy?

“It was like the Wild West – everyone was out for themselves. If you had a problem with a broker, all you could do was break his legs.” This is how Scottish Life director of sales Jim Gilchrist remembers life as a financial adviser before the advent of polarisation.Now that the FSA is recommending the […]

Offset web

Did anyone at the FSA think to ask the Inland Revenue what it thinks of commission offset for a whole industry? I am sure it was not too worried by a few IFAs doing a bit of offset but a whole industry? This could get even nastier. Christopher McMullenMcMullen (Insurance Brokers),Bournemouth

Life offices&#39 dilemma as clock ticks

The FSA&#39s decision to abolish polarisation has left life off-ices in a strategic quandary over whether to back the IFA sector or enter into multi-tie agreements.With the regulator entering into a period of consultation, many observers believe it is unlikely to alter the main thrust of the proposals. Life offices realise they have to act […]

First State fund buys British

First State Investments has established the British mid-cap fund, an Oeic that aims for capital growth by investing in medium-sized companies within the UK.The fund is part of First State&#39s British range, which consists of three other funds, British smaller companies, British all companies and British opportunities.The British mid-cap fund will consist of between 60 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com