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The old favourites

Income unit trusts were badly hit over the year to July 1, being down by an average of around 23 per cent against the average fall in UK equity trusts of about 18 per cent.

Over 10 years, however, the average UK equity trust is up by 34.2 per cent compared with a rise of 52 per cent in the average income unit trust.

Extraordinarily, it has been companies paying a high dividend that have been most severely treated, including companies with healthy balance sheets and good cashflows. The wholesale downgrading of dividend payers has given managers a number of good opportunities. Despite some of the best long-term income fund managers performing worse than the market as a whole, I still think it is right to stick to those who have performed best over the longer term.

I particularly like the Invesco Perpetual funds, as well as Bill Mott’s PSigma income fund, Adrian Frost’s Artemis income fund and Robin Geffen’s Neptune income fund where he has a unique approach to global research and continues to produce impressive results.

George Luckcraft’s Axa Framlington monthly income fund has been a poor performer over the past year, mainly because he invests a bigger proportion of the fund in smaller companies. However, I still believe that he is one of the best income fund managers in the country and should again outperform the majority of his peers.

The best performers over the past year among the bigger funds have been the Threadneedle income funds managed by Leigh Harrison and Jonathan Barber.

Despite the favourable taxation treatment of capital gains compared with income, I still believe that the long-term overall returns of income funds will outperform most growth funds.


Shared opportunity

As we return from our summer breaks for the final push towards the end of the year, it is worth assessing whether there has been any improvement in the mortgage market over the holiday period.

Societies see big issues being missed

The Building Societies Association says the reforms fail to address many of the bigger issues faced by borrowers. Its survey earlier this year found that only 16 per cent of people see stamp duty as a big concern.

Broker Talkback

Do you agree with the FSA’s call for greater help from brokers in tackling mortgage fraud?

Dual deal for care

There are now officially more pensioners in the UK than children The Office for National Statistics revealed last week that the number of people over state pension age has risen to 11.58 million, overtaking the 11.5 million people under 16.


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