A look at the IA UK Equity Income sector shows much of the same taking place there. The top performer was the £3.9m UBS UK Equity Income Fund, managed by Steve Magill, a senior portfolio manager with a focus on UK value equity strategies.
Only four other funds from the sector beat the FTSE All Share in 2016. Schroder Income Maximiser, Jupiter Income Trust and JOHCM UK Equity Income apply the value style to investing.
The remaining fund, HC Charteris Premium Income, states a definite preference for growth on its fact sheet. However,
when commenting on expensive ‘bond proxies’ in July 2016, the firm said: “We are focusing on value rather than what is deemed to be fashionable.”
Other funds in the IA UK Equity Income sector’s top-15 highest returners last year included Neptune Income, Scottish Widows UK Equity Income and Threadneedle UK Equity Alpha Income. They all have a tilt towards value stocks in their portfolios.
Just outside of the top 10 but still sitting in the top quartile is R&M UK Equity Income, which made a little over 12% last year. In 2015, manager Dan Hanbury shifted his portfolio towards value stocks.
He said at the time: “When we look at our factor data over the past 100 years, where we are at the moment – with 200-year highs in bond markets and all the rest of it – the next big trade has surely got to be the value trade.
“That is where you are going to make money on a 10-year view and I don’t want to miss that by being on the wrong side of it when it happens.”
