Fact sheet: Royal London UK Equity Income

Rated Fund Information
Rated Funds Group
?Money Observer has arranged all its Rated Funds into easy to understand Rated Fund Groups, comprising funds and investment trusts.
UK EQUITY INCOME
Sector
UT UK Equity Income
Fund type
OEIC
Primary aim
No data available.
Why Money Observer Rates Royal London UK Equity Income

New for 2017. Emphasis on cash flow to underpin dividend prospects

This popular fund has been in the capable hands of Martin Cholwill since 2005. It is a solid long-term performer with a yield of just under 4 per cent, paying a quarterly income.

It invests across a broad spectrum of industries in which Cholwill is able to identify value, in particular focusing on companies with attractive cash flow characteristics.

Although he can invest in companies of any size, he tends to have a larger allocation to medium-sized and smaller companies than many of his peers. He also favours a high-conviction approach and would normally expect to hold between 40-60 stocks in the fund.

Macroeconomic factors are taken into account when considering company prospects. However, Cholwill says it is stock selection, based on thorough company research, including meeting management teams, which is the main driver of the fund's performance.

This involves seeking out companies with strong business models and sound finances yet whose shares are sufficiently out of favour so that they can be purchased on a dividend yield premium.

He places a particular emphasis on companies generating significant free cash flow in order to identify those companies that can consistently support a growing and sustainable dividend and avoiding those that are the casualties of 'creative accounting'.

As he points out, it is cash flow that pays the dividend, funds investment for future growth and helps provide resilience in a range of market conditions. While he is size-agnostic, he often identifies sources of dividend growth outside of the well-known names within the FTSE 100 index.

3 Year Performance
Fund Performance30.6%
Average of Rated Funds Group32.7%
Sector Performance24.8%
Fund information
Fund name
Royal London UK Equity Income M Inc
Fund manager company
Royal London Unit Tst Mgrs Ltd
Fund type
OEIC
Fund manager
  • Martin Cholwillsince 01/03/2005
Accolades
Fund objective
The RL UK Equity Income Fund seeks to achieve a combination of income and some capital growth. This pure equity income fund invests solely in high yielding UK stocks, with a particular emphasis on companies generating significant free cashflow to fund sustainable dividend payments.
Benchmark
  • FTSE All Share
Investment style
None
Investment method
Shares
Quick stats
1 Year return
12.6%
1 Year rank in sector
51/93
Sector
UT UK Equity Income
Yield
3.8%
Ongoing charge (OCF)
?A fund’s ongoing charges figure (OCF) is similar to the old-style total expense ratio. It reflects the annual charge to investors in the fund, in percentage terms, but does not include extra performance-related fees (where these are levied) or the fund’s trading expenses on its underlying investments.
0.67%
Fund size
£1,954m (£1,634m last year)
FE Risk score
?FE Risk Scores measure the riskiness of instruments relative to the FTSE 100 index of shares. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. Cash-type investments will have scores close to zero. Funds will tend to have scores in the 0-150 range. The FTSE 100 is always scored at 100. There is no upper limit.
91
Mid price
816.6
Top in this sector
Fund name1 Year
Man GLG UK Income27.2%
MI Chelverton UK Eq Inc25.5%
Unicorn UK Income24.2%
Unicorn UK Ethical Income21.8%
Courtiers UK Equity Income20.8%
...more in UT UK Equity Income

Performance snapshot

Holdings snapshot

Fund also available on these pension platforms:

Performance vs Sector

Cumulative performance
 1 mth3 mth6 mth1 yr3 yr5 yr
Fund-1.4%0.9%0.2%12.6%30.6%96%
Sector-1.6%-0%0%12.8%24.8%66.3%
Rank within sector47 / 9827 / 9845 / 9651 / 9319 / 856 / 79
Quartile2nd2nd2nd3rd1st1st
Calendar performance
 YTD - 20172016201520142013
Fund9.3%11%5.5%7%34.9%
Sector8.1%9.1%4.9%2.8%24.8%
Rank within sector27 / 9525 / 9049 / 8510 / 839 / 79
Quartile2nd2nd3rd1st1st
Risk statistics
Alpha
?Alpha is a measure of a fund's over- or under-performance by comparison to its benchmark. If the Alpha is 5, the fund has outperformed its benchmark by 5%; so the greater the Alpha, the greater the outperformance.
0.85
Beta
?Beta estimates a fund's volatility by comparison to that of its benchmark. A fund with a beta close to 1 means that the fund will move generally in line with the benchmark. Higher than 1 and the fund is more volatile than the benchmark and vice versa.
1.02
Sharpe
?This commonly-used measure calculates the level of return over and above the return of a notional risk-free investment, such as cash. The difference in returns is then divided by the fund's volatility. The resulting ratio is an indication of the amount of excess return generated per unit of risk.
0.74
Volatility
?Volatility (or standard deviation), when applied to an investment fund, expresses its risk. It shows how widely a range of returns varied from the fund's average return over a particular period. For example, if a fund had an average return of 5%, and its volatility was 15, this would mean that the range of its returns over the period had swung between +20% and -10%.
8.95
Tracking error
?This measures the standard deviation of a fund's excess returns over the returns of an index or benchmark portfolio. As such, it can be an indication of 'riskiness' in the manager's investment style. A Tracking Error below 2 suggests a passive approach. At 3 and above the the manager will be deploying a more active investment style.
2.82
Information ratio
?This is a useful risk-adjusted measure of actively managed fund performance. It is calculated by deducting the returns of the fund's benchmark from the fund's overall returns, then dividing the result by its tracking error. The higher the Information Ratio the better. It is generally considered that a figure of 0.5 reflects a good performance, 0.75 very good, and 1.00 outstanding.
0.34
R-Squared
?An indication of how closely correlated a fund is to an index or a benchmark. Values for R-Squared range between 0 and 1, with 0 indicating no correlation at all and 1 showing a perfect match. Values upwards of 0.7 suggest that the fund's behaviour is increasingly linked to its benchmark.
0.9
Price movement
52 week high847.9
52 week low733.5
Current bid price-
Current offer price-
Current mid price816.6
Region
1UK100%
Industry sector
1Financials25.78%
2Industrials20.96%
3Consumer Services18.46%
4Oil & Gas9.79%
5Health Care8.18%
6Consumer Goods5.4%
7Utilities5.27%
8Basic Materials4.67%
9Telecommunications1.49%
Asset type
1UK Equities100%
Individual holdings
1ROYAL DUTCH SHELL5.66%
2HSBC HOLDINGS PLC4.7%
3ASTRAZENECA PLC4.52%
4BP4.13%
5GLAXOSMITHKLINE3.66%
6AVIVA2.69%
7BBA AVIATION PLC2.65%
8HARGREAVES LANSDOWN PLC2.4%
9RIO TINTO2.39%
Management
Fund manager group
Royal London Unit Tst Mgrs
Fund manager company
Royal London Unit Tst Mgrs Ltd
Fund type
OEIC
Fund objective
The RL UK Equity Income Fund seeks to achieve a combination of income and some capital growth. This pure equity income fund invests solely in high yielding UK stocks, with a particular emphasis on companies generating significant free cashflow to fund sustainable dividend payments.
Benchmark
  • FTSE All Share
Investment style
None
Investment method
Shares
Fund manager
NameSinceBiography
Martin Cholwill01/03/2005Martin joined RLAM in February 2005 to focus solely on managing the Royal London Equity Income Fund. Martin began his fund management career in 1983, spending 21 years working for AXA Investment Managers, managing a wide variety of UK equity mandates. In 1996 he took over managing AXAs UK Equity Income Fund which he ran successfully. Martin,s proven and pragmatic investment approach have delivered strong, consistent performance for investors throughout the several market cycles of his 32 year career. He has a degree in Mathematics from the University of Durham.
Compliance
IA Recognised, UCITS IV Compliant
Domicile
No data available.
Fund for sale in
United Kingdom
Royal London UK Equity Income A Inc
Initial charge4%
Annual charge1.25%
Min single investment£1,000
Min regular saving£100
Available in ISAYes
Ongoing charge (OCF)1.29%
Total expense ratio (TER)1.32%
Bid price-
Offer price-
Mid price781.4
CurrencyGBX
Price updated17/11/2017
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeNA02
Royal London UK Equity Income M Acc
Initial charge-
Annual charge0.62%
Min single investment£100,000
Min regular saving£1,000
Available in ISAYes
Ongoing charge (OCF)0.66%
Total expense ratio (TER)-
Bid price-
Offer price-
Mid price191.5
CurrencyGBX
Price updated17/11/2017
TypeAccumulation
Institutional or retail classRetail
Domicile-
Citi codeGWUQ
Royal London UK Equity Income M Inc
Initial charge-
Annual charge0.62%
Min single investment£100,000
Min regular saving£1,000
Available in ISAYes
Ongoing charge (OCF)0.67%
Total expense ratio (TER)0.68%
Bid price-
Offer price-
Mid price816.6
CurrencyGBX
Price updated17/11/2017
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeLWG4
Royal London UK Equity Income Z Inc
Initial charge-
Annual charge0.55%
Min single investment£25,000,000
Min regular saving£50,000
Available in ISAYes
Ongoing charge (OCF)0.59%
Total expense ratio (TER)-
Bid price-
Offer price-
Mid price122.5
CurrencyGBX
Price updated17/11/2017
TypeIncome
Institutional or retail classInstitutional
Domicile-
Citi codeJX4D
Data provided by

The Content is only for your general information and use and is not intended to address your particular requirements. The Content does not constitute any form of advice, recommendation or arrangement by Money Observer and is not intended to be relied upon by you in making (or refraining from making) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision.

This information is sourced from our partner Financial Express. We believe the data to be correct however you should take care in using any information.

You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.