Marlborough to merge underperforming fund away

Marlborough Fund Managers is to merge its underperforming UK Income & Growth Trust run by Geoff Hitchin and Nicholas Cooling into the Extra Income fund.

UK Income & Growth has delivered a return of 56.6 per cent compared to the 96.2 per cent delivered by the IMA UK Equity Income sector, which the fund sat in until July this year, according to data from FE Analytics.

It was removed from the sector after failing to meet the yield requirements. Funds in the sector must achieve a 110 per cent yield of the FTSE All Share index at the end of the fund’s year.

Article continues after advert

The IMA said to ensure compliance with that target, funds in the sector are tested in three-year rolling periods by taking a simple average of the yield figure achieved for each fund at its year end.

Funds that fail to meet the 110 per cent average yield for each three-year rolling period will be removed from the sector.

Now the fund will merge into Extra Income run by Nigel Beidas and Matthew Rainbird, who have co-managed the fund for nearly five years.

Extra Income has produced second quartile returns in its IMA UK Equity & Bond Income sector in five years and is top quartile in three- and one-year periods, according to data from FE Analytics.

The merger, which was approved by unitholders at an extraordinary general meeting today will take effect on Friday January 17 2014.

A spokesman for Marlborough said Mr Hitchin and Mr Cooling would remain at Marlborough.

Mr Hitchin runs the Global Bond, Bond Income and Cash funds with Mr Cooling, who also manages the Balanced, Global, Cautious and Defensive funds.