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Prepare for choppy waters
While the UK Equity Income sector has been popular due to sustained outperformance, managers face tougher times ahead
Manager Toby Thompson, who previously managed the £2.9bn Newton Higher Income fund, took over the fund in 2002. He takes a contrarian approach to stock picking, and has 26.27 per cent in banks and 10.68 per cent in life insurance.
The fund is also characterised by its large stock positions, with 8.21 per cent in the Vodafone Group, its largest holding, and 6.43 per cent and 6.42 per cent in Royal Dutch Shell and HSBC Holdings respectively.
The fund is susceptible to the volatility of the markets as a whole, and has suffered as a result of its exposure to banking. However, as it employs a contrarian strategy, it is best to view it over a longer time period, when it will be less affected by short-term market turbulence.
Laura Mossman is features editor at Investment Adviser
