Growing income in a hard patch
Best and worst Pep-qualified trusts
Sunday 05 February 1995
The shares must have a yield greater than 110 per cent of the FT All Share stock market index, thereby boosting income opportunities. The opportunity for capital growth is also on offer.
Unlike building society accounts, investing in equities carries a risk. They are subject to the vagaries of the stockmarket, as the performance of this sector in the past year shows.
All the 105 unit trusts in this sector have showed a loss in the past 12 months, with the top 10 funds averaging a fall of about 13 per cent.
The bottom 10 funds dropped in value by about 23 per cent, with the average fund showing losses of about 15 per cent.
These figures include the "bid-offer spread", an initial charge of between 5 and 6 per cent levied as soon the investment is made. Among the sector's top performers is Jupiter Tyndall's income fund. Not only has it been top over the past 12 months. It achieved the same results over three and five years, suggesting that its more recent success was not a one-off result. The notional yield on this fund is about 3.9 per cent.
A solid performance comes from Morgan Grenfell's UK Equity Income unit trust, with a yield of about 3.2 per cent. Julia Eynon, a marketing manager, said her company's approach is based on a bottom-up, stock-picking method with about two thirds of the fund invested in large companies, 20 per cent in small firms and the rest in mid-sized stocks.
This year, Morgan Grenfell's approach will be relatively defensive, with investments being held in companies such as Burmah Oil, Barclays, Bass, British Telecom and Abbey National.
Guinness Flight's High Income fund is another top performer, regularly within the leading 25 per cent of funds in the sector. Jack Springman, a director at the company, said: "We aim to deliver a yield of 115 per cent of the FT All Share index.
"What we try to do is identify trends and take a fairly contrarian view of the market, following what may sometimes be out of fashion but still a good stock." The fund currently delivers a yield of about 4.3 per cent.
Also in the top 10 funds is Govett's UK Equity Income unit trust. Richard Bolchover, a director responsible for the fund, said his company used a detailed screen-based system to analyse performance and check yields.
"I took the fund over in December 1992 and since then we have rebalanced it," he said. "It now delivers a yield of about 4.3 per cent, compared to an average of about 3.5 for the sector."
The fund, which looks mainly at stocks in the FT-SE 350 index, is currently invested in a range of building stocks, public utilities and some brewery shares, all of which offer the prospect of higher income. In the coming year, Mr Bolchover expects the market to rally, although not hugely.
Top 10 1 yr(105) 3 yrs(101) 5 yrs(97)
1 Jupiter Income 87.50 174.79 (1) 167.61 (1)
2 Maldon General 87.23 140.00 (19) 150.40 (10)
3 United Friendly UK Eq Inc 87.17 143.11 (13) 165.44 (2)
4 BWD Equity Income 87.02 135.64 (31) 143.55 (14)
5 Morgan Grenfell UK Eq Inc 86.95 158.76 (3) 164.88 (3)
6 Royal Life High Inc 86.92 134.29 (36) 133.64 (40)
7 Guinness Flight High Inc 86.69 142.46 (15) 149.42 (11)
8 Govett UK Equity Inc 86.43 139.56 (21) 128.18 (60)
9 Lazard UK Income 86.42 135.96 (29) 148.73 (12)
10 St Vincent High Inc 86.39 132.55 (41) 132.69 (43)
96 Kleinwort Benson High Yld 78.50 137.63 (27) 129.59 (51)
97 Prosperity Inc & Growth 78.31 126.37 (70) 112.12 (90)
98 Edinburgh Equity & Inc 78.01 122.37 (81) 135.79 (36)
99 St James Pl UK High Inc 77.93 129.03 (60) --- 100 Allied Dunbar Eq Inc 77.66 120.68 (86) 123.87 (74)
101 NM Income 77.86 119.33 (92) 116.38 (86)
102 Standard Life UK Eq Inc 77.18 119.69 (91) 105.38 (96)
103 Allied Dunbar High Inc 76.63 120.61 (87) 118.58 (82)
104 Allied Dunbar High Yield 75.41 118.77 (94) 123.81 (75)
105 Fidelity Income Plus 74.80 117.80 (95) 102.17 (97)
The table shows the value on 30 January 1995 of £100 invested over one, three and five years. Prices on offer to bid basis with net income re-invested. First ranking on one-year basis; brackets show number of funds in sector and ranking for each time frame.. Source: Micropal
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
- 2 Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
- 3 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 4 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 5 Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish independence referendum: A nation divided against itself
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...
Day In a Page
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize