Square Mile has marked the Vanguard FTSE U.K. Equity Income index with a recommended rating, where it will join 26 other Vanguard passive vehicles in the Academy of Funds.
The index begins with the 350 largest listed stocks in the UK but removes investment trusts, REITs, and any stocks not forecasted to pay dividends in the next 12 months. Then, remaining stocks are ranked by dividend yield and the top near 50% are included in the index.
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“Square Mile’s recommended rating reflects the analysts’ view that the fund presents a credible option for investors seeking higher dividends while maintaining broad UK equity exposure, at a low cost. The analysts have a high regard for the passive team at Vanguard, believe the fund is competitively priced, and are confident the fund will track its benchmark to within a reasonable range, as it has done historically,” Square Mile said.
Along with the index recommendation, Square Mile has upgraded the rating of the Waverton Sterling Bond fund to AA, citing conviction in the team.
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“While performance has been challenged over recent months, the fund maintains the attributes to potentially play an attractive role as a diversifier within a multi-asset portfolio, thanks to its focus on delivering returns with low correlation to equities,” Square Mile stated.
Square Mile also retained the ratings of the Schroder Global Energy Transition fund, Invesco Asia Dragon trust, Ruffer Investment Company and Ruffer Diversified Return.