UK Equity Income Fund in a Favorable Position After Lockdown Hiding
In the tumultuous world of investments, the Ninety One UK Equity Income fund stands as a beacon of stability for many investors, according to its manager, Ben Needham. The fund, which focuses on delivering a steady increase in income payments, is classified as a 'UK all companies' fund by The Investment Association, due to its annual dividend yield of 1.8 per cent, which is below the yield from the FTSE All-Share Index of 3.6 per cent.
Despite this, the fund's emphasis is on 'quality' companies, market leaders that should reassure investors as they can make money even when the economy is weak. The fund's top 10 holdings include cross-border money transfer business Wise and pub giant JD Wetherspoon, among others.
The Ninety One UK Equity Income fund does not chase yield, instead, Needham aims to deliver a decent overall return of 10% plus with minimal effort. He believes that the current state of UK equities is in a sweet spot, making it an attractive investment opportunity.
The fund's payout provides investors with downside protection, according to Needham, and it achieves a steady increase in income payments since 2020, paying income quarterly. The ongoing annual charge for the fund is 1.6 per cent.
While the fund has underperformed against the FTSE All-Share Index over the past five and three years, it has outperformed over the past year. Over the past one, three, and five years, the fund's returns were 10.2, 28.7, and 34.2 per cent, respectively, while the FTSE All-Share Index's returns were 10.1, 33.9, and 66.9 per cent, respectively.
The fund comprises 34 holdings, all constituents of the FTSE All-Share Index. It's worth noting that the payout ratio from companies in the FTSE All-Share Index is around 6% per annum.
For a more general understanding, the Ninety One UK Special Situations fund, another strategy from the same company, focuses on undervalued UK equities with strong potential for growth. This fund has delivered top-quartile returns in its sector over various time frames, outperforming the FTSE All Share Index.
For precise information on the Ninety One UK Equity Income fund's strategy and performance, it would be advisable to consult the fund's official documentation or reports available through financial databases. Wise, a disruptor in the international money transfer market, is among the fund's top 10 holdings, having launched a platform for third parties to offer global money transfers to their customers.
In conclusion, the Ninety One UK Equity Income fund offers a focus on quality companies, a steady income stream, and the potential for capital growth, making it an attractive choice for investors seeking a balanced investment in the UK market.
Investors looking for a stable income stream from quality companies in the UK market might find the Ninety One UK Equity Income fund appealing, as it aims to provide a decent overall return of 10% plus and pays a steady income quarterly. This fund, which holds 34 stocks, includes cross-border money transfer business Wise and pub giant JD Wetherspoon among its top 10 holdings. Despite its underperformance against the FTSE All-Share Index over the past five and three years, it has outperformed over the past year.
