A merger of the Premier Income and Monthly Income funds looks likely as Chris White heads for the exit and is replaced by a manager with a more traditional income bent.
The newly-merged Premier Miton said White (pictured) had decided to step down as lead manager on the Premier Income and Premier Monthly Income funds, as well as co-manager on the Premier Optimum Income funds. He had managed Premier’s UK equity income strategies since 2010.
White will leave at the end of April 2020 when he will be replaced by Eric Moore. Moore has been the sole manager of the Miton Income fund since July 2014. He was previously director of UK equities for Insight Investment and was also a UK equity manager at Gartmore.
Premier Miton wouldn’t comment on where White was going.
Fund mergers anticipated
AJ Bell head of active portfolios Ryan Hughes said he is expecting to see fund mergers given the differences in style between the two managers.
Moore’s fund falls under what he considers to be a traditional income approach with “much more of a focus on the large-cap income payers”.
By contrast White’s funds have a greater bias toward smaller companies, Hughes notes. A third of Premier Income is in small-cap stocks, which are defined as companies with a market cap sub £500m.
“I would imagine we will see holders of the Premier Income Fund having their portfolio morphed into more of Eric’s type of strategy,” said Hughes. “We fully expect to see some mergers in the near future to try and get some economies of scale going.”
Premier Miton weighing its options
A spokeperson for Premier Miton said following Moore’s appointment it is “considering the optimum fund range to offer investors”.
“These three funds will be managed by the same fund manager employing the same investment approach, so there is clearly scope for some harmonisation from an investment and client cost point of view,” a spokesperson for the fund group said.
“As it stands they all offer something different in the form of either monthly, quarterly or half-yearly dividend payment for income-seeking investors.”
Small cap bias lifts performance
White’s bias toward smaller companies has helped his funds do better than other UK equity income funds, Hughes said.
Premier Income and Premier Monthly Income were among the most improved funds in Sanlam’s latest income study, shooting up the rankings and into the top 14 funds that have delivered superior returns over five years.
Moore’s Miton Income fund finished 41 out of 62 funds in the Sanlam study but avoided its dreaded Black List of consistent laggards.
Premier Income and Monthly Income have consistently outperformed Miton Income over six months, one year and three years though on a five year-view both are in the second quartile of IA UK Equity Income funds.
But despite its more recent outperformance Premier Income has still fallen short of the FTSE All Share over five years, returning 34.8% against the index’s 35.5%, Hughes noted. Since White took over the fund in December 2010 it has returned 124.6% against the FTSE All Share’s 97.7%.
Miton Income versus Premier Income funds
| 6m | 1y | 3y | 5y | |
| Miton Income | 10.0 | 9.6 | 11.2 | 32.4 |
| Premier Income | 19.9 | 15.1 | 14.7 | 34.8 |
| Premier Monthly Income | 19.7 | 14.9 | 14.3 | 34.3 |
| IA UK Equity Income | 11.0 | 10.8 | 15.8 | 30.7 |
