For Stephen Peters, investment analyst at Charles Stanley, it is these bigger funds that may struggle going forward, especially those full of blue-chip defensive names which, because of their size, are unable to invest further down the cap scale.
In terms of the winners going forward, Peters picks out the £222m Standard Life Equity Income Trust run by now ex-Legget colleague Thomas Moore, who has been moving out of so-called large-cap ‘bond proxies’ in favour of less expensive mid-cap names.
He is cautious on mixed earnings momentum at the sector level, with ongoing earnings downgrades afflicting certain sectors, particularly mining and oil & gas.
Other funds under £1bn picked out by wealth managers as ones to watch include the £364m Chelverton UK Equity Income, £621m Majedie UK Focus and £230m Ardevora UK. Still, as they themselves become more established, so a fresh new batch of names will arrive with their own ideas on how to profit from staying close to home.
A full run through of UK equity funds features in the July edition of Portfolio Adviser, out soon.
