Royal London Asset Management has come out top in Sanlam Private Investments' UK Equity income fund study, which does not make great reading for Aberdeen Asset Management.
Sanlam aggregates performance, volatility and income distributed over five years - with the most recent period of performance - given a greater weighting in its ratings.
According to Sanlam, Citywire AAA-rated Martin Cholwill’s (pictured) Royal London UK Equity Income, which was yielding 3.6% at the end of 2014, has recorded a net income of 26% over the last five years at a volatility of 3.4.
‘Martin Cholwill has read both the economy and the stock market extremely well through 2014’, the study’s author Charles Brand said.
‘A bias towards medium-sized companies in economically sensitive areas of the market has moved his Royal London UK Equity Income fund up a further two places to claim the top spot.’
Cholwill replaces the Unicorn Income fund, which was hit by the death of its manager John McClure in June 2014. The fund does retain its place in the White List though, sitting in seventh spot.
Brand said: ‘Fraser Mackersie and Simon Moon, co-managers of the fund, took up the reins. Since then the fund has slipped down the rankings. This appears more a function of underperformance from the small cap sector the fund invests in, rather than due to the change of management.’
‘The fund focuses on high quality names; businesses they see as offering an attractive combination of high and growing cash flows and low fundamental business risk,’ Brand said. ‘The team has done an excellent job of generating an attractive reward from such relatively low risk business.’
‘Just over half the [AXA] fund is invested outside of the FTSE 100; smaller companies, such as FTSE Fledgling index stocks, are included,’ Brand commented. ‘This brings some liquidity concerns, but as the fund is a modest £137 million in size, there are not excessive at this time.’
To compensate for these new entrants, the JOHCM UK Equity Income, Schroder UK Alpha Income, RBS Equity Income and Invesco Perpetual Income & Growth dropped from the White List into the Grey List
Aberdeen dominates Black List
There was bad news for Aberdeen as it found a number of its funds on the Black List following its acquisition of Scottish Widows Investment Partnership. Funds on this list include Aberdeen UK Equity Income, Aberdeen UK Equity Dividend and Scottish Widows UK Equity Income.
‘[And] There is little to suggest the Scottish Widows UK Equity Income fund will experience a brighter future,’ Brand said. ‘It remains one of the weakest performers over the last year and that keeps it pegged firmly to the bottom of the list.’
Nine out of 10 of the funds that filled the lowest positions last time remain there. ‘Performance wise, Aberdeen UK Equity Dividend fund (previously Swip UK Income), has not ranked higher than 40th (of 53 names currently) in each of the last five years, leaving second last on the list and only marginally better than the Scottish Widows fund,’ Brand said.
While BlackRock UK Income remains top of the Black List, Brand had some kind words for the fund.
‘Despite its placing at the top of the Black List, BlackRock UK Income has been the third best performer in the study over the last year, marking a significant improvement since Mark Wharrier took the helm in November 2013.’
Elsewhere the Jupiter Income and Newton Higher Income funds were promoted from the Black List to the Grey List.