The Daily Telegraph - Saturday - Money
Fuel your income with seven smaller funds
It’s easy to go for the well-known income funds, but smaller rivals can be more nimble, reports James Connington
Size £227m; charge 0.85pc; yield 3.8pc This fund invests primarily in small and medium-sized companies, with top holdings including storage service Big Yellow Group and Jupiter Fund Management.
It has consistently been a top performer, sitting in the top 25pc of its sector for performance over one, three and five years. Over the past 10 years it has delivered a total return of 180pc, compared with 77pc for the FTSE All Share index.
Size £255m; charge 0.9pc; yield 4.3pc This fund is another to sit in the top quarter of funds in its sector over one, three and five years. It has exposure to traditional large income stocks such as Shell in its top 10 holdings, but also includes some FTSE 250 businesses such as defence firm Qinetiq. The manager, Henry Dixon, took over in 2012, but over a 12-year career spanning multiple funds he has delivered ed total returns nearly double those of his peers, according to data service FE.
Size £417m; charge: 0.84pc; yield 4pc Like Man GLG’s fund, Premier Income’s top 10 holdings include both large FTSE 100 dividend payers such as Imperial Brands and smaller firms such as £580m logistics group John Menzies. Men The fund is another ano consistent performer. per It sits in the top 25pc of its peer group grou over one, three and five years, and since si manager Chris White W took over it has delivered a total return of 110pc, versus 80pc for the FTSE All Share. A £10,000 investment five years ago would have h delivered total in income of £2,856, according acc to FE. Size £129m; charge: 0.8pc; yield 4.3pc Of all the funds here, Slater Income has delivered the highest income to investors over the past five years, at £2,890 on a £10,000 investment.
Since its launch in 2011 the total return has been 120pc, compared with 88pc for the FTSE All Share.
The fund has not been as consistent as some, but is in the top 25pc of its sector over one and five years. The highly regarded investor Mark Slater is one of the fund’s comanagers.
Size £638m; charge 0.81pc; yield 3.8pc The largest fund in this selection, Unicorn UK Income makes the list as it has a strong bias towards small to medium-sized companies; FTSE 100 stalwarts are notably absent from its top 10.
Top holdings include aviation services business BBA Aviation and high performance polymer company Victrex, both FTSE 250 firms.
The fund is in the top 25pc of its sector over one, three and five years, and since managers Simon Moon and
‘Investors have flocked to income funds, so some have swelled in size’
Fraser Mackersie took over in 2014 it has delivered a total return over 36pc, compared with 31pc for the FTSE All Share.
Size £291m; charge 0.88pc; yield 4.7pc This fund has not performed as well as some of the others here, but is backed by Ellen Powley and Lee Gardhouse, the managers of Hargreaves Lansdown’s MultiManager Income & Growth Trust.
According to Hargreaves, the fund meets the requirement of adding value for long-term investors, and its “big picture” approach to investing can complement a portfolio that already contains several funds that focus on specific stocks rather than the wider economy.
It has a 16pc allocation to US stocks. Over 10 years it has delivered a 92pc total return, versus 77pc for the FTSE All Share.