Montanaro UK Income Fund STG Unhedged
UK Equity Income
Rated Fund 2016-20. Offers income for the future
Highly commended in Money Observer's 2015 and 2016 fund awards, Montanaro UK Income was launched in 2006 by Charles Montanaro, whose business, Montanaro Asset Management, specialises in investing in smaller UK and European companies. Consequently, although this fund invests primarily in UK small and medium-sized companies, up to 20% may be invested in Europe where the fund had 9% at the end of 2019. The fund sits in the Investment Association's UK all companies sector but yields 3.4%, with income being paid quarterly. That is expected to rise to 4% in 2020.
Montanaro describes his investment approach as conservative. He looks for well-managed, high-quality companies in growth markets because he believes these are the companies that deliver the highest returns over the long run. This does not mean that he has to compromise on valuation, however - he looks for "quality growth" at a reasonable price.
Investment ideas are generated internally, rather than through stockbrokers, and researched in detail. Desktop research is supplemented with company and site visits to kick the tyres. Montanaro says he is a genuine long-term investor, which keeps turnover and transaction costs low. Once he has identified a suitable company, his ideal holding period is forever. This is one reason why he does not always greet corporate takeovers with as much enthusiasm as others. To show that interests are aligned with investors, he and his investment team have their own money in the fund.
FundCalibre, the fund ratings and research provider, likes this fund because it "adds something extra to an income portfolio". Managing director Darius McDermott says: "It invests mainly in smaller companies with growing dividends ' it's income for the future."
Narrative and ratings content all as of January 2020.See all Money Observer rated funds
|Marshalls PLC||3.61 %|
|IntegraFin Holdings PLC||3.42 %|
|Avast PLC||3.27 %|
|Big Yellow Group PLC||3.22 %|
|FDM Group (Holdings) PLC||3.12 %|
|Pennon Group PLC||3.05 %|
|LondonMetric Property PLC||3.04 %|
|XP Power Ltd||2.99 %|
|St James's Place PLC||2.91 %|
|4imprint Group PLC||2.87 %|
|United Kingdom||86.49 %|
|Europe - ex Euro||5.72 %|
|Financial Services||18.82 %|
|Consumer Cyclical||10.10 %|
|Real Estate||9.01 %|
|Consumer Defensive||8.14 %|
|Basic materials||5.29 %|
Charles Montanaro graduated with an honours degree in Anthropology from Durham University in 1976. He spent four years in industry before joining Merrill Lynch in 1980 as a private client broker in London. He joined Dean Witter Reynolds in 1984 and Drexel Burnham Lambert in 1987 as a Senior Vice President, where, in both cases, he was their top institutional broker in the UK, joining the high-yield bond department in 1989. In 1990, Charles joined MMG Patricof (now Apax Partners) as a Director of investment banking working with UK smaller companies. In August 1991, he founded Montanaro to specialise in analysing and investing in quoted European smaller companies on behalf of leading institutions. He has since launched and managed several funds totalling over €1 billion and established a strong track record. In addition, he has served on the Boards of two public smaller companies. He was appointed a Director of the Montanaro European Smaller Companies plc on 12 January 2012.
Data provided by Morningstar.
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 Morningstar. 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.