Stick or twist for investors?

WITH Mark Barnett’s departure, investors with money in either Invesco UK Equity High Income or UK Equity Income now face a dilemma. Do they stick in the hope of the new joint managers (Ciaran Mallon and James Goldstone) t urning t he funds’ fortunes around? Or do they twist by selling their holdings – and moving their money to another asset manager?

Jason Hollands, of Tilney, says it might seem ‘a strange time’ to move when there is now the prospect of meaningful change at Invesco. But he says investors have to make sure portfolios are best positioned to benefit from economic recovery when it comes. Although he says UK equities look cheap, especially compared to other world stock markets, he believes there are better alternatives than the two Invesco funds.

He says: ‘I think investors are better off with funds focused on holding companies with resilient earnings, strong balance sheets and where they benefit from high barriers to competition. These are t he t ypes of companies backed in funds Evenlode Income and Liontrust Special Situations.’

Darius McDermott, of Chelsea Financial Services, also believes there are better alternatives. Among his preferred income-orientated funds are Man GLG UK Income, Montanaro UK Income, Rathbone Income and – again – Evenlode Income.

Peter Hargreaves, founder of Hargreaves Lansdown, believes investors should now consider whether investment funds with an income bent are an appropriate way to make money from the stock market. He told Wealth: ‘I think UK recovery and income stocks might not be the investors’ longterm darling for much longer.’