By comparison, the IMA Global Equity Income sector saw net retail sales of £111m in September, making it the fifth-most popular equity sector for the month.
Year to date, the sector has delivered a 19.84 per cent average return, with funds such as Artemis Global Income, Legg Mason Global Equity Income and Invesco Perpetual Global Equity Income sitting among the top-five performers.
The Artemis Global Income fund, managed by Jacob de Tusch-Lec, has produced top-quartile returns in one year and three years, and since launch in 2010 has returned 66.29 per cent, compared with the sector average return of 48 per cent.
Mr de Tusch-Lec, who was recently profiled in Investment Adviser, says the fund’s recent good performance can be attributed to exposure to Europe, particularly Germany.
In his latest manager commentary, Mr de Tusch-Lec explains: “While we continue to monitor things closely, we continue to believe Europe provides a good risk-return trade-off compared to other regions. Two of the fund’s top-10 holdings, media groups RTL and ProSieben, are direct beneficiaries of the strong German economy.
“Another driver [of] the fund’s strong performance has been avoiding ‘expensive defensives’. These stocks are just too expensive (for us). Instead, our exposure is to relatively ‘unknown’ stocks such as Lorillard, a US company with a 40 per cent share of the booming US market for e-cigarettes, and Greencore, an Irish sandwich maker.”
Managed by Nick Mustoe, the Invesco Perpetual Global Equity Income fund also has a stellar track record, claiming the top spot for three years and ranking second in one year. The fund, which was launched in March 2009, has a significant weighting to Europe – 33.99 per cent – and is overweight sectors such as consumer products, healthcare and financials.
Mr Mustoe’s commentary on the fund’s latest factsheet notes: “Business activity in the eurozone grew faster than expected this month. Further signs of recovery in the eurozone came from Spain, which has just emerged from two years of recession. Equity markets dipped towards the end of the month as investors turned their attention from monetary policy to the fiscal impasse in the US.
“[In September,] we bought a new position in Atlantia, an Italian toll road operator, which also has operations elsewhere. In spite of having sound company fundamentals, in our view the shares have been held back, as they have been strongly correlated with Italian macro concerns.”
THE PICKS
Artemis Global Income Fund
With consistent top-quartile returns, Jacob de Tusch-Lec’s fund has earned a place in any income portfolio. Using a combined quantitative and fundamental analysis approach, Mr de Tusch-Lec has exposure to companies that are not frequently bought by his peers: South Korea-based automobile component manufacturer SJM Co, pharmaceutical research company AbbVie and Spanish commercial bank Bankinter all feature in the top 10. From launch in 2010 to November 25 2013, the fund has returned 66.29 per cent, compared with the sector average return of 48 per cent.
Invesco Perpetual Global Equity Income fund
Managed by Nick Mustoe, this fund rivals the Artemis product. Beating its competitor to the top spot in three years, the fund isn’t one to be overlooked. Mr Mustoe invests in companies that he believes offer attractive valuations, sustainable profit margins and growing and sustainable dividends; the top 10 holdings include global firms such as Novartis, Roche and BT. Since launch in March 2009, the fund has delivered 120.62 per cent, compared with the sector average return of 104.75 per cent.
EDITOR’S PICK
Legg Mason Global Equity Income fund
This fund has produced top-quartile returns across one year and three years, dropping into the second quartile in five years. Managed by investment trio Sean Bogda, Paul Ehrlichman and Safa Muhtaseb since launch in 2008, the team operates what they describe as a “classic value” process, focusing on firms that appear to be trading at low prices relative to the intrinsic value. Since launch, the fund has delivered 95.59 per cent, compared with the sector average return of 90.92 per cent.
