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Miton multi-cap income fund retains top position in Sanlam’s White List

15 August 2017

Changes at the top for Sanlam UK’s biannual guide to the best UK equity income funds revealed in latest edition of study.

By Rob Langston,

News editor, FE Trustnet

The CF Miton UK Multi Cap Income has retained its place at the top of Sanlam UK’s White List of the best performing UK equity income funds at the mid-year point.

In its July update the Sanlam UK Income Study, on which the White List is derived, highlights the success of funds in the IA UK Equity Income sector regardless of short-term uncertainty.

The study is split into three parts, with the best performers making up the White List, while funds in the Black List are Sanlam’s least highly rated. The Grey List comprised of those companies that sit somewhere in the middle.

The £923.4m, five FE Crown-rated Miton fund took the top spot in the White List at the start of the year, replacing former favourite Trojan Income.

The fund is managed by investment veteran Gervais Williams and FE Alpha Manager Martin Turner and invests across the market cap spectrum.

“Combining consistently strong returns, low volatility and delivering a high income pay-out for the period reviewed, the fund is substantially ahead of its peers in terms of meeting the requirements set out in the study for income investors,” Sanlam noted.

Performance of fund vs sector over 5yrs

Source: FE Analytics

Over five years the fund has delivered a total return of 127.29 per cent compared with a 65.57 per cent gain for the sector in the same period.

Moving up to second in the list was Slater Income replacing Royal London UK Equity Income, which fell to sixth place. Other changes at the top included MI Chelverton UK Equity IncomeMarlborough Multi Cap Income and Majedie UK Income.

“The Chelverton fund has risen from the lowest position in the White List in the last study,” Sanlam UK noted. “The team have had an extremely strong performance return profile over the past year, topping the peer group for that time period.

“This is in stark contrast to the prior period, where they ranked poorly in terms of performance. Their mid- and small-cap bias has served them extremely well more recently, along with their continued high income distribution levels.”


There were changes to the Grey List, too with a few new additions and demotions from the White List.

The most notable re-rating was for Threadneedle UK Equity Alpha Income which fell by 15 places, having sat third in the White List at the start of the year.

Another fund that dropped into the Grey List was Schroder Income Maximiser. The fund had been promoted to the White List during the previous study but fell back into the Grey list following the latest update.

Sanlam UK noted: “Although it was the highest climber in the January 2017 study, those gains appear to have unwound somewhat. Performance has not been as strong as it was in the previous study; however, the team has maintained the fund’s high yield, which still ranks first among its peers for dividend income provided in the past five years.”

Other funds dropping into the Grey list include Franklin UK Equity Income and RBS Equity Income.

One new entrant to the Grey List in the July 2017 study was Man GLG UK Income, managed by FE Alpha Manager Henry Dixon, which moved up 32 places from the Black List.

Performance of fund vs sector & benchmark over 5yrs

Source: FE Analytics

Sanlam analysts highlighted the four crown-rated fund's exceptional performance for the most recent period, as shown in the chart above, highlighting its small- and mid-cap bias.

Over five years the £215.8m fund has delivered a total return of 88.05 per cent compared with a 65.57 per cent gain for the average IA sector fund and a 58.03 per cent rise in the benchmark FTSE All-Share index.

Castlefield BEST Income, NFU Mutual UK Equity IncomeNewton UK Income all moved from the Grey list to the Black List. Meanwhile, Scottish Widows UK Equity Income moved up off the foot of the Black List, leapfrogging Aberdeen UK Equity Income and HSBC Income, which has replaced it as at the bottom.


Three new funds have also been added following the relaxing of yield requirements by the Investment Association (IA) earlier this year.

Two funds – Schroder Income and Rathbone Income – were added to the Grey List. The third new fund, Invesco Perpetual Income & Growth, was added directly to the Black List.

The firm noted that the sector changes – lowering the hurdle to 100 per cent of the FTSE All-Share index yield from 110 per cent – could have a “potentially significant impact on investing for income”.

It will also give managers greater cope for investing in non-income paying stocks, but it could also lead to dividend cuts by some funds given the lower hurdle for inclusion in the sector.

The firm warned that funds’ emphasis could shift to pursue capital gains over income to outperform the index.

Phil Smeaton, chief investment officer at Sanlam UK (pictured), said: “The IA’s decision to amend the requirements for a fund to enter the UK Equity Income sector is shaping the equity landscape, and has the potential to impact investors looking for income in the future.

“While funds have greater flexibility, there is a limited pool of stocks available, and investors therefore need to ensure they have the right blend of funds to make sure they are diversified.

“The market has been open to speculative activity, but the fundamentals remain strong. While concerns raised about the future relationship between the UK and EU – not to mention the shape of the labour market – to come have some merit, the outlook for UK listed companies appears to have weathered any potential storm.

“Profit margins remain in healthy shape offering potential for investors to take advantage of larger dividends and any stocks perceived to be at a discount.”

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.