Sanlam warns on markets as it rates equity income funds
Sanlam Private Wealth has warned investors to remember the challenges facing global equity markets.
The six-page Income Study publication stated: “Global equity markets started 2015 positively overall, but the year so far can be broadly divided into two parts.
“Markets generally moved upwards in sterling terms until around mid-April as, despite a harsh US winter, equity markets broadly assumed that the continued recovery from the global financial crisis remained under way.
“Having said that, the summer has so far been more challenging.”
According to the publication, equity markets have been declining mainly for three reasons: the likelihood that US interest rates will rise before the end of the year; pressure on Greece, and the rapid rise and fall of the Chinese equity market, which could have global implications.
Sanlam Private Wealth also updated its white, grey and black lists of UK equity income funds, compiled using criteria based on performance, volatility and income distributed.
The white list, consisting of the top 14 funds by overall merit, was led by the PFS Chelverton UK Equity Income Fund, which had a net dividend yield of 4.4 per cent as of 30 June, net income of £36.50 from a £100 investment for the five years to that date and volatility of 3.1 per cent for 1 July 2010 to 30 June 2015.
Sanlam Private Wealth said: “This fund is co-managed by David Horner and David Taylor and has benefited from focusing on mid and smaller capitalisation companies, which have outperformed the wider market, while FTSE 100 stocks have been clear laggards in 2015.”
The grey list was led by the Premier Income Fund, with the Santander Equity Income Fund in second place.
The Scottish Widows UK Equity Income Fund (A Inc) was at the bottom of the black list.
Sanlam Private Wealth said: “Most of the black list retains familiar names from prior studies, with the Scottish Widows UK Equity Income Fund supporting the rest of the pack, though this fund has produced a positive return for investors over the last 12 months.”
| The top five white list funds |
| PFS Chelverton UK Equity Income |
| Unicorn UK Income |
| Royal London UK Equity Income |
| SLI UK Equity Income Unconstrained |
| Threadneedle UK Equity Alpha Income |
Source: Sanlam Private Wealth
Right to reply
A Scottish Widows spokeswoman said: “Aberdeen Asset Management has managed this fund since April 2014. The SW UK Equity Income fund is actively managed on a low-risk basis, designed to produce less volatile returns relative to the benchmark than other actively managed funds.”
