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.

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Royal London UK Equity Income M
Royal London Unit Trust Managers Ltd
Open Ended Investment Company
UK Equity Income
0.72 %
Risk Rating
3 Year Sharpe
3 Year Alpha
4.3 %
The investment objective and policy of the Fund is to achieve a combination of income and some capital growth by investing mainly in UK higher yielding and other equities, as well as convertible stocks. The Fund may hold transferable securities, (including Exchange Traded Funds which are closed ended funds, but not those which are collective investment schemes), government and public securities, deposits and cash (for the purposes of EPM and redemption of units). It may also hold derivatives for the purposes of EPM only
Holding %
Royal Dutch Shell PLC B 5.41 %
BP PLC 4.35 %
HSBC Holdings PLC 4.14 %
GlaxoSmithKline PLC 4.11 %
AstraZeneca PLC 4.02 %
Rio Tinto PLC 3.04 %
British American Tobacco PLC 2.65 %
RELX PLC 2.37 %
Dunelm Group PLC 2.33 %
BBA Aviation PLC 2.27 %
Region %
United Kingdom 100.00 %
Sector %
Financial Services 20.29 %
Consumer Cyclical 20.20 %
Industrials 15.87 %
Energy 10.21 %
Healthcare 8.51 %
Basic materials 7.42 %
Utilities 5.51 %
Royal London Unit Trust Managers Ltd
EC3V 0RL, London, United Kingdom
Legal Structure
Open Ended Investment Company


Martin Cholwill
Joined 03/01/2005

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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