Axa star Luckraft admits regrets over larger-cap mining stocks

Referring specifically to his £506.1m Equity Income and £340.5m Monthly Income funds, Luckraft said he had placed the importance of extracting dividends above generating capital growth, but confessed the decision was "badly timed".

Both funds underperformed the IMA UK Equity Income sector in total return terms in 2007, but paid out more income than ever before, with Equity Income giving investors 27.7p and Monthly Income paying 11p. In 2006 the funds paid out 20.6p and 10.1p respectively.

Luckraft said: "Mining stocks have little or no yield, and they pose a real issue for me as an income fund manager. I haven't had any of the larger mining stocks and obviously I should have done. I was looking to get the dividends up on the funds and that was a badly timed thing."

He added: "I should have put some of the bigger miners on with hindsight, but it's important an income fund does what it says on the tin."

Luckraft emphasised the dilemma between the share price predominance of lower yielding mining stocks and the turbulence experienced by higher yielding financials was an issue affecting all equity income managers last year.

His comments followed IFAs' calls for action on his £120.8m Managed Income fund in March, which has suffered consistent underperformance.