Royal London UK Equity Income M
UK Equity Income
Rated Fund 2017-19. Offers mix of large and small companies
UK equity income fund veteran Martin Cholwill has led this fund well since 2005 and enjoyed strong asset growth as a result: the fund has grown to £1.9 billion.
It is a solid long-term performer with a good yield of 4.5% and it pays an income quarterly.
Cholwill can invest in companies of any size and has a 57/43% split at present between large companies and medium/small companies. This reflects a more modest allocation to smaller companies than he has had in the past, but it is still greater than that of many of his peers. He favours a high-conviction approach and normally expects to hold between 40 and 60 stocks.
The fund invests across a broad spectrum of industries in which Cholwill is able to identify value. But there is a particular focus on firms with attractive cash flow, in order to identify companies that can consistently support a growing and sustainable dividend, and to avoid those that are the casualties of ‘creative accounting’.
As he points out, it is cash flow that pays dividends, funds investment for future growth and helps provide resilience in a range of market conditions. He often identifies sources of dividend growth outside the well-known names in the FTSE 100 index.
Macroeconomic factors are taken into account when considering company prospects. The fund is underpinned by cautious economic growth assumptions, and its focus on strong market positions, dividends backed by cash flow and robust balance sheets should provide resilience in a whole range of possible economic outcomes.
However, Cholwill says stock selection, based on thorough company research, including meeting management teams, is the main driver of the fund’s performance.
Narrative and ratings content all as of 01 January 2019.See all Money Observer rated funds
|Royal Dutch Shell PLC B||5.33 %|
|AstraZeneca PLC||4.93 %|
|BP PLC||4.20 %|
|HSBC Holdings PLC||4.05 %|
|GlaxoSmithKline PLC||4.02 %|
|Hargreaves Lansdown PLC||2.58 %|
|IG Group Holdings PLC||2.50 %|
|Aviva PLC||2.47 %|
|Rio Tinto PLC||2.34 %|
|BBA Aviation PLC||2.30 %|
|United Kingdom||99.98 %|
|Financial Services||22.62 %|
|Consumer Cyclical||18.08 %|
|Basic materials||5.95 %|
He became a Fund Manager in 1983 and joined AXA’s UK Equities team as an analyst. During the 21 years that Martin worked for AXA he managed a variety of UK equity portfolios. Finally as a specialist UK equity income Manager he took over management of AXA’s UK Equity Income Fund in 1996. Martin joined RLAM and took over management of the Royal London Equity Income Trust in March 2005.
Data provided by Morningstar.
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