MI Chelverton UK Equity Income Fund B Accumulation shares
UK Equity Income
Rated Fund 2014-19. Targets yields of 4% plus
This fund has been highly commended in past Money Observer fund awards. It has been managed since launch in 2006 by David Horner, the founder of Chelverton, and David Taylor.
The fund’s investment universe consists of small and medium-sized UK companies, which can make it more volatile than other funds in its peer group over shorter periods. The fund has been a standout performer over the longer term, though.
The managers believe opportunities exist in this area because the dull-but-worthy smaller companies they favour are often overlooked and under-researched by stockbrokers and other income fund managers. The fund currently yields 5.3%. Income is paid quarterly.
The managers have a clear investment process. They will only invest in a company for the first time if it yields at least 4% on a 12-month view. This is a cast-iron rule to which there are no exceptions.
They screen all small and medium-sized companies above £50 million in size regularly to identify targets. They then test companies’ balance sheets to ensure firms don’t have too much debt and that their working capital requirements are not excessively onerous. Sales growth and margins are examined. The aim is to build a portfolio of companies that will grow their dividends from one year to the next.
Provided the managers are satisfied, they will invest in a company and may add to their holding until the yield falls to 3%, following share price appreciation. Once the holding gets to 2%, it will be sold and another higher-yielder will be added to their portfolio of around 100 stocks.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
|Phoenix Group Holdings PLC||1.87 %|
|Ultra Electronics Holdings PLC||1.86 %|
|BCA Marketplace PLC||1.81 %|
|Ashmore Group PLC||1.80 %|
|Inchcape PLC||1.64 %|
|IMI PLC||1.58 %|
|TT Electronics PLC||1.54 %|
|Go-Ahead Group (The) PLC||1.53 %|
|National Express Group PLC||1.51 %|
|DFS Furniture PLC||1.50 %|
|United Kingdom||97.08 %|
|Consumer Cyclical||30.03 %|
|Financial Services||15.48 %|
|Basic materials||7.49 %|
David is an award winning fund manager, who began his career as an analyst in the research department at Wedd Durlacher, later moving into fund management in 1987.He joined Gartmore Investment Limited in 1991. In 1995, he moved to LGT and latterly spent nearly seven years as head of UK smaller companies at HSBC Asset Management. David joined Chelverton Asset Management in January 2006. He earns him a AAA Citywire Fund Manager rating.
David is an acclaimed fund manager, specialising in small and mid-cap quoted investment and SME unquoted investment. He has many years’ experience in corporate finance assignments, identifying, structuring and managing investments as well as purchasing and managing private equity, specialist listed and AIM portfolios. He qualified as a chartered accountant in 1985 and has held senior positions in Touche Ross & Co, 3i Corporate Finance and Strand Partners Limited, with numerous public and private company directorships. In October 1997, David set up Chelverton Asset Management Limited to provide the investment management for the investment trust now known as Chelverton Growth Trust PLC, and was responsible for launching, in May 1999, Small Companies Dividend Trust PLC.
Data provided by Morningstar.
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