Multi-managerMay 8 2013

TB Wise Income Fund leads IMA peer group

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ByKevin White

The manager of the £26.80m fund said its objective was to provide a starting yield approximately equivalent to a good building society account, with the potential for income and capital growth from a diversified portfolio with no geographical or asset class restrictions.

The fund was launched in October 2005 and leads its peer group with third place in the Investment Management Association Flexible Investment share category. It has delivered returns in three years that are 15.84 percentage points higher than the peer average.

The portfolio pays dividends every quarter and has 41 holdings, the largest being the Standard Life Property Income Fund at 7.3 per cent and the Isis Property Trust at 7.2 per cent. The largest sector allocations are in UK equity income shares at 25.6 per cent and property at 21.4 per cent.

It boasts a historic yield of 5.4 per cent, and a yield of 5.89 per cent in the past 12 months. It is available as an open-ended investment company or an Isa with a minimum investment of £1000, maximum initial charge of 4 per cent, maximum annual management charge of 1.65 per cent and a total expense ratio of 2.11 per cent.

Mr Yarrow said holdings within fixed interest and property had risen since the start of the year, and while dividends had been cut in key holdings, R.S.A, Aviva and Morgan Sindall, Legal & General increased by 20 per cent during 2013.

Elsewhere in the IMA Flexible Investment category the Premier Enterprise Fund has struggled. Launched in 1995 and managed by Nigel Sidebottom, the portfolio dropped by 8.03 per cent and is placed 103 and last within the peer group.

The £11.93m fund’s objective is to provide long-term capital growth with an asset allocation weighted towards commodities at 17.7 per cent, Far East excluding Japan, emerging markets, and cash at 16.7 per cent.

Adviser view

Gavin Haynes, managing director of Bristol-based Whitechurch Securities, said: “The TB Wise Income Fund is a solid balanced offering and has delivered an attractive yield – 5.4 per cent – as part of a competitive total return. Two-thirds of the fund is invested in equities, with the balance in corporate bonds and property funds.

“The Premier Enterprise Fund is a specialist offering that invests in a managed portfolio of closed-end investment companies. While Mr Sidebottom has a wealth of experience in this area, performance has been disappointing in recent years, with the weighting in commodity-based trusts acting as a drag recently. The asset mix and underlying holdings make this a higher-risk offering.”