‘We profited when everyone hated property’

With inflation eroding the value of cash savings many people – particularly those in retirement – are turning to investments to deliver a steady income.

David Hambidge has been at the helm of the Premier Multi-Asset Distribution fund since 1995 and believes that even though interest rates are rising there is still little to shout about for cash savers. He told Telegraph Money why he bought property when it was unloved and revealed his biggest error.

We are seeing a demographic shift in the UK. We have an ageing population and people are in retirement for longer – so that’s the wind we follow. The issue for income investors is that traditional incomeproducing assets, such as cash and government bonds, have been giving particularly poor returns.

People are being forced to look at different areas and this fund offers diversification, that’s our key word. We have a fund that is extremely appropriate for the retirement market.

We’ve been running this strategy since 1995 and the portfolio is populated with income-producing assets. We are contrarian investors, and we look for cheap assets. Today the UK stock market is the least popular in the world. You see that from the money, both domestic and international, flowing out of the UK market. But that throws up opportunities.

We like to buy those asset types that are out of favour with investors. But every asset we purchase has to bring something to the income party. We buy funds, so the stock-specific risk is very low indeed.

Our biggest funds are Franklin UK Equity Income and Schroder Income. We like both because they David Hambidge dge joined Premier er in 1987 and has as managed multitiasset funds since nce the firm entered ed the market in 1995.

Mr Hambidge dge focuses on income funds and is considered one of the most experienced multi-managers working in Britain today. have produced a higher yield than the UK stock market and that income has grown nicely over the years.

Both funds have a bias to large companies – whereas the other funds in the portfolio provide small company exposure – but their make-up is quite different from the FTSE All Share index and each other. They have “high active share”, which means there is a large difference in their make-up compared with the benchmark index.

Shares are a good asset for income. However, the problem with the stock market is that it’s very volatile and can be a frightening place to invest at times. The bias of the fund has always been towards UK stocks [currently 28.5pc of the fund], because it’s been one of the most robust markets from a dividend point of view.

Premier’s David Hambidge tells Adam Williams how he invests to produce income for retired savers

Investors are seeking income to mitigate the impact of inflation, but we want to do that without eroding the value of their capital.

There are many funds that produce an income but do so at the expense of growing the capital. We believe that is simply robbing Peter to pay Paul. We want to generate an attractive income and provide the potential for longte term capital growth as well.

The UK commercial property market in 2013 was probably the best call we’ve made in the past few years. It was out of favour with the investing community and the property market, ap apart from London, hadn’t produced an any decent returns for some time.

In the summer of 2013 we took our c commercial property position up from the single digits to 20pc fairly quickly.

We were much more interested in the regions, rather than London, because that’s where we saw the value. The next 18 months saw uninterrupted growth. That’s been our biggest win because of the timing of both the entry and the exit. We didn’t try and squeeze the lemon dry, we got out at the start of 2016 and by that time property had gone from the least popular investment to the most.

We haven’t been in the technology sector or the American stock market. We would have been better off if we’d had some American shares, as it has been the best performing market. But it is also one of the lowest yielding stock markets, which would have then meant less income for our investors.

It is still very much our view that the US is expensive and doesn’t fit into this fund. And you always have some exposure to America’s economy, no matter where you invest. Absolutely. I and my immediate family do, and always have done. I believe you should eat your own cooking. The Foresight Solar Fund listed on the London Stock Exchange in 2013 and we purchased a position when the company was looking to raise further capital in March 2015.

Renewable energy targets have encouraged investment in this area in recent years and we believe that large-scale solar energy projects have the potential to provide the most consistent and stable yields.

Renewable energy is here to stay, and this is renewable energy on an industrial scale.

The Foresight fund is a good example of this, with a forecast dividend for 2018 of 6.58p per share compared with a first-year dividend of 6p, an increase of 9.6pc and in line with the company’s objective

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