The biannual report downgraded the £6.4bn fund to a 'sell', which relegates in to the 'Grey List' of products its deems to be struggling. The fund, managed by Adrian Frost and Adrian Gosden, is widely regarded by many industry commentators as the natural new home for those exiting Invesco Perpetual's Income franchise following Neil Woodford's resignation.
"We have long been supporters of Adrians Frost and Gosden and they have regularly featured in client portfolios. However, our job on the Income Study is to remain unemotional and allow the process to speak for itself. Due to unexceptional returns during the past five years, the fund is falling down the Grey List and investors should therefore consider alternatives," Paul Surguy, head of managed funds at Sanlam and the author of the report, said.
The Sanlam Private Investments (SPI) Income Study is a quantitative measurement of the performance, volatility and dividend generation of funds, which divides them into its 'White List' or top funds, 'Grey List' of struggling funds, and 'Black List' – the worst performers.
Surguy added: "Perhaps it is worth reiterating that the study is quantitative, ranking income, total return and volatility of funds in the equity income sector, making it perhaps one of the least emotive methodologies available to private investors.
"Thus, we have seen some new entrants as some old favourites fall out. With the beginning of the study period now being 2009, we can clearly see that returns have been dominated by funds that have exploited outperformance by smaller and medium-sized companies, something we remain cognisant of when rating our buys and sells."
