The struggle with UK Equity Income Funds is whether they actually offer value to investors. This fund is no different to many in the sector. This is one of the best performing funds and yet over five years it has struggled to outperform the FTSE All Share Index. Investors use these funds for a combination of reasons; which can include income, or a defensive strategy. The argument behind the defensive element is that those companies paying dividends tend to be better managed companies.
It is worth highlighting that with the negative press around Woodford this fund is a plain vanilla fund. It doesn’t have high yield, non-yielding or unquoted stocks. The manager believes he is a contrarian investor with a focus on the bottom end of the FTSE 100 and the FTSE 250. The fund however does appear to hold similar names to other UK Income Funds so a potential investor may want to challenge this statement….read more