Equities  

Sanlam study labels Unicorn Income top equity income fund

The latest ‘income study’ from Sanlam Private Investments UK has named John McClure’s Unicorn Income fund as the best fund in the IMA UK Equity Income sector.

The fund replaces Clive Beagles and James Lowen’s JOHCM UK Equity Income fund at the top of the ‘white list’ of best UK equity income funds after it delivered a return of 39 per cent in the 12 months to the end of June 2013.

The latest version of the bi-annual study highlighted the Unicorn fund and the PFS Chelverton UK Equity Income fund, run by David Horner and David Taylor, as two funds that were “challenging the status quo” in the equity income sector dominated by the likes of BP and Vodafone by investing in smaller companies

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Sanlam has raised its rating on the Chelverton fund from ‘hold’ to ‘buy’ after a stellar year that saw the fund deliver a return of 40.2 per cent in the past year.

Michael Clark’s Fidelity Moneybuilder Dividend fund and Mark Barnett’s Invesco Perpetual UK Strategic Income fund have also moved into the top echelon of UK equity income funds.

The two funds have replaced Julian Chillingworth’s Rathbones Blue Chip Income & Growth and Thomas See’s Schroder Income Maximiser in the ‘white list’ after outperforming in the past six months.

However, the Schroder Income fund, the fund over which Mr See places covered calls to increase the yield, has moved closer to the ‘white list’ after beating the Maximiser fund by more than five percentage points in the year to the end of June 2013.

The BlackRock UK Income fund, run by Adam Avigdori, had dropped into the lowest rated funds, the black list, following a year of significant underperformance that coincided with the departure of co-manager Nick McCleod-Clarke on sick leave.

The F&C UK Equity Income fund and the Ignis UK Equity Income fund also dropped into the ‘black list’ following tough years.

However, an uptick in performance from Bill Mott on the Psigma Income fund saw him jump from the ‘black list’ into the ‘grey list’.

The income study takes the 54 funds in the IMA UK Equity Income sector which have more than £20m in assets and at least a five year track record and ranks them according to measurements such as performance, volatility and income distributed to come up with the white, grey and black lists.