Newton Investment Management’s Tineke Frikkee has been replaced as fund manager of the flagship £2.2bn Higher Income fund as the firm looks to consolidate its fund range.
Frikkee is being replaced by head of UK equities Richard Wilmot and is now in discussions with the company about her role with the firm.
In addition to replacing Frikkee, Newton also intends to change the way the fund is run to ensure it continues to generate continued growth in both income and capital for investors.
Newton is planning to broaden the buy and sell discipline of the fund from buying at 115 per cent of market yield and selling at the market yield, to buying at 75 per cent of the market yield and selling at 50 per cent of the market yield. The firm also intends to reduce the fund’s yield progressively over the next 18 months, with the aim of meeting at least a 10 per cent premium per annum to the FTSE All Share yield over rolling three year periods.
Newton chief investment officer Simon Pryke says: “Newton has developed a strong capability and reputation in equity income investing, with close to 20 per cent of our firm‐wide assets now being managed in this manner. Performance of our equity income suite has remained strong overall and we have a positive track record in managing change. We are confident that going forward the Newton Higher Income Fund will achieve both a premium income and an attractive total return in the long run, in line with what we aim to achieve with the rest of our equity income funds.”
Newton has also announced plans to consolidate its funds in its range which it considers to be sub-scale. The group intends to close the the Newton Discovery Fund, Newton Pan-European Fund and the Dublin-domiciled BNY Mellon UK Equity, BNY Mellon Sterling Bond and BNY Mellon Continental European funds, subject to regulatory approval. It also intends to merge the Newton Cautious Managed fund into the Newton Managed Income fund.
BNY Mellons head of UK wholesale Scott Goodsir says: “With the onset of the RDR and increased regulatory demands, we will see a more empowered investor as we look to 2013 and beyond. We believe that it is those firms who ensure their investment offering is focused on delivering continued outperformance that will strengthen their position in this dynamic market environment. Newton has a strong history of ensuring that it is successfully positioned for change, and we are confident these enhancements will ensure the firm remains at the leading edge of the global investment industry.”
Frikkee has been manager of the Newton Higher Income fund since April 2004 having replaced Clive Beagles. The fund has been popular with advisers in the past but has struggled in recent times. The fund is bottom quartile in the Investment Management UK Equity Income sector over three years having returned 18.8 per cent compared to a sector average of 26.3 per cent.