Small is beautiful

Ultra-low interest rates have seen investors flock into vast, multibillion pound equity income funds. But size and a well-known name aren’t everything, says James Connington in The Daily Telegraph. Smaller, nimbler funds can take “meaningful positions” in both smaller, fast-growing companies and large corporations. Here are some to consider.

Montanaro UK Income Top holdings include the storage giant Big Yellow and Jupiter Fund Management, but Montanaro’s expertise is in SMES. A “consistently top performer”, the fund has delivered a total return of 180% over 10 years, compared with 77% for the FTSE All Share index.

Man GLG UK Income Another strong performer, with exposure to traditional large income stocks such as Shell, but also some FTSE 250 businesses such as defence firm Qinetiq.

Unicorn UK Income “FTSE 100 stalwarts are noticeably absent” from this fund’s top ten holdings – it has “a strong bias” towards SMES and FTSE 250 firms, such as BBA Aviation and the polymer company, Victrex.

Slater Income This pacey fund, co-managed by Mark Slater, is not always consistent, but has delivered the highest income to investors over five years (£2,890 on a £10,000 investment) – a total return of 120% since 2011.