Fizzing Fever-Tree gives FTSE fund added sparkle

WHAT DOES IT DO?

Invests in FTSE giants, particularly utilities, pharmaceutical and tobacco firms such as Unilever.

Fund manager William Meadon likes international companies with strong balance sheets, good cash flow, experienced management and pricing power over their product.

WHAT DOES THE MANAGER INVEST IN?

A current favourite is ITV, which pays a good dividend and has spread its revenue base beyond TV advertising into global content licensing.

Meadon also likes mixer drinks maker Fever-Tree which is tapping into a trend for premium spirits. He says: ‘Despite the rapid rate of growth of this firm we still think the market is underestimating the company’s global potential.’

WHAT DO THE EXPERTS THINK?

Laith Khalaf of Hargreaves Lansdown says: ‘The fund underperformed in June because of exposure to some of the UK-focused companies which were hit hardest by the referendum result.

‘It has quite big holdings in some of the biggest FTSE firms, which means it has to work hard to differentiate its performance from the FTSE 100 index.’

WHAT DO THE EXPERTS LIKE?

Currently yielding around 3.76pc, it’s a decent income payer and has increased its dividend every year for 43 years.

AND ARE THERE ANY DOWNSIDES?

A strong UK focus means the past few weeks have been tricky, but long-term performance has been sturdy, with a return of 50pc over five years.

Khalaf says, at 0.74pc, the annual management fee is a bit top-heavy if it isn’t a top performer.