The performance is strong and it may well blend into a portfolio of holdings especially as the market is fairly volatile at the moment
There are over 400 UK Equity Growth and Income Funds; providing investors with access to many different investment styles. So choosing the right fund depends upon understanding their methods and aims.
Performance is part of the equation but equally the management team is crucial. We have met a number of talented Fund Managers, from the likes of Standard Life Investments, Neptune, Schroders, Legal and General, and Liontrust (not all of these are in our portfolios).
One manager I have met several times is Richard Colwell who manages the Threadneedle UK Equity Income Fund. On the occasions I have met him I never get a deep sense that what he is offering is anything different to any of the other big UK equity income funds. I have also felt that there are more dynamic managers which offer more.
However, one thing we always do is challenge our thinking and in our latest meeting it dawned on us that perhaps our view of the fund (and manager) is wrong. The reason being that the fund is by its very nature cautiously managed. In the latest discussion Richard explained how the approach borders on being defensive with a focus on good quality stocks.
When I started digging around further it became apparent that where other large UK Income Funds have faltered this fund has continued to deliver strong outperformance. It is therefore worthy of consideration for investors either looking for income or for those looking to re-invest the income for growth.
In this review we will look to unpack the fund further enabling potential investors to consider whether this is a fund for them.