UK equity income investor favourites

The unexpected resignation of Invesco Perpetual’s star income manager Neil Woodford may have resulted in a boost to the assets under management (AUM) for some of his rival funds.

However, Investment Adviser research shows that some UK Equity Income funds have been experiencing surging inflows since the start of the year.

The research, which uses data from FE Analytics and takes into account the effect of performance on funds under management, reveals a significant interest in equity income funds from investors since January 2013.

Calculating real fund flows – which take into account the effect of performance – is not an exact science, but the method followed by Investment Adviser provides a relatively close figure that advisers can use to plan client portfolios.

So, how was it worked out? The first step was to calculate the difference in the fund’s size between 2012 to 2013. The dates chosen, based on the latest data available at the time, were November 9 2012 and November 8 2013.

Then, using FE Analytics performance data, the performance of each fund across that time period was recorded. We then applied the effect of performance to the 2012 AUM figure for each fund to estimate how much it would have grown without the impact of fund flows.

The estimated AUM was then compared with the actual AUM as at November 8 2013 to produce a list of the top 10 funds that have seen investor inflows in spite of underlying performance.

The most popular fund, according to the data, is the Artemis Income fund, managed by Adrian Frost and Adrian Gosden, which has seen a £634.9m boost in assets this year. The fund has also performed well, returning 24.57 per cent to its investors year to date (November 8 2013).

This fund has been high up on the list of potential beneficiaries of ‘Woodford money’, so much so that the group has spoken out about capacity concerns.

Currently at £6.3bn in AUM, the Artemis fund is one of the largest in the IMA UK Equity Income sector – beaten only by the Invesco Perpetual Income and High Income funds, managed by Mr Woodford.

Similarly, the JOHCM UK Equity Income fund, run by Clive Beagles, has seen investor inflows of £493.7m in 2013 (to November 8). Like Artemis, it has warned that it doesn’t want any ‘Woodford money’.

Other equity income funds that have received the lion’s share of investor assets include the Threadneedle UK Equity Income fund, managed by Leigh Harrison and Richard Colwell, Matt Hudson’s Cazenove UK Equity Income fund and John McClure’s Unicorn UK Income fund.

Jenny Lowe is features editor of Investment Adviser

Artemis Income

Managers: Adrian Frost and Adrian Gosden

2012 fund size: £4,565.4m

2013 fund size: £6,322m

Performance: 24.57%

Investor inflows: £634.9m

JOHCM UK Equity Income

Manager: Clive Beagles

2012 und size: £1,277.1m

2013 fund size: £2.183m

Performance: 32.38%

Investor inflows: £493.7m

Threadneedle UK Equity Income

Managers: Leigh Harrison and Richard Colwell

2012 fund size: £1,507.7m

2013 fund size: £2,329m

Performance: 29.73%

Investor inflows: £373.1m

Unicorn UK Income

Manager: John McClure

2012 fund size: £63m

2013 fund size: £422m

Performance: 44.88%

Investor inflows: £330.7m

Cazenove UK Equity Income

Manager: Matt Hudson

2012 Fund Size: £128.4m

2013 Fund Size: £497m

Performance: 32.96%

Investor inflows: £326.3m

Marlborough Multi Cap Income

Managers: Giles Hargreave and Suddarth Chand Lall

2012 fund size: £193.2m

2013 fund size: £598m

Performance: 41.54%

Investor inflows: £324.5m

Troy Trojan Income

Managers: Francis Brooke and Hugo Ure

2012 fund size: £820.9m

2013 fund size: £1,252m

Performance: 18.68%

Investor inflows: £277.8m

Royal London UK Equity Income

Manager: Martin Cholwill

2012 Fund Size: £326.3m

2013 Fund Size: £712m

Performance: 35.91%

Investor inflows: £268.5m

SJP Allshare Income

Manager: George Luckraft (mandate at Axa Investment Managers)

2012 fund size: £512.1m

2013 fund size: £872m

Performance: 24.43%

Investor inflows: £234.8m

Vanguard FTSE UK Equity Income Index

Manager: N/A

2012 fund size: £180.7m

2013 fund size: £421m

Performance: 24.03%

Investor inflows: £196.9m