‘We’re insured if shares crash the way they did last October’

money in the fund at its peak.

As the portfolio is one of Telegraph Money’s favourites for income, we thought it was time to weigh up whether it still deserved this newspaper’s backing.

Here we ask Mr Williams about how the fund is pulling through, the risk of investing in companies no one has heard of and how he has taken out an insurance policy in case shares crash again.

We are what’s called a “multi-cap” fund, which means that we invest in both big and small companies. We own mainly British firms and aim to provide a growing income for our investors, crucially an income that grows faster than that from rival funds.

We pay out income four times a year, with a current yield of around 4pc a year, which we hope to grow to around 7pc a year at the current fund price. We like companies that grow their dividends, as we believe their share prices will follow that trajectory.

We are happy to invest in large FTSE 100 companies, often associated with paying a dividend, but we also invest in smaller companies. It’s easy to assume that these smaller players are immature, but there are many we can identify as producing very attractive dividend growth.

A good example of this is Bioventix, which has been in our portfolio for around six years. It is a small company that produces antibodies for testing in hospitals. It is quoted on the Alternative Investment Market (Aim) and is growing its income fast, as more and more hospitals around the world use its services.

The dividend has gone up and up and the share price with it, much faster than many other mainstream income stocks. The firm helps companies that are in need of funding for litigation. Unlike others in the industry, which help on individual cases, it tends to deal with firms that have gone bust. It helps to settle disputes quickly, meaning people can get their money back sooner. It takes a share of that money and its profits are growing fast. I like to think it has the momentum to keep growing for the next three to five years.

“dividend cover”. But you have to make sure you pick the right ones.

The Aim market, in which a third of the fund is invested, has had a bad year and last October was particularly rough. But we have insurance. Our fifth-largest holding is an “FTSE 100 put option”, which is essentially an insurance policy that will pay out if stocks go down.

It doesn’t stop markets falling, but it takes the sting out of it. It provides us with cash, not only covering some of our losses but also allowing us to buy back into the market when Our best performer in recent months has been Savannah Petroleum. It was buying cheap oil assets in Nigeria, pending approval from the government. Since approval was given its shares have gone up and we think there is more money to be made yet.

The worst performer has been Amigo Holdings, the loans company. It provides loans for people with poor credit scores, but recently said it would be taking on fewer clients, which has hit the share price. We have had to reduce our position.

www.telegraph.co.uk/funds