Cautious UK strategy wins the day for Margetts

The £159.13m fund is currently in 23rd place in the Investment Management Association’s Mixed Investment 20-60 per cent share sector. Its performance easily outstrips the peer group average three-year return of 19.43 per cent.

The fund’s manager, Toby Ricketts, has aimed to provide a balance of long-term capital growth and increasing income in any economic sector in any geographic area through a wide range of assets.

In reality, the UK as a region has held sway in terms of geographic allocation within the portfolio, at 69.77 per cent, while more than half of the portfolio, 52.77 per cent, is invested in equity funds.

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Out of the top 10 funds chosen by Mr Ricketts and his team, the £381m Premier Income fund invests in UK blue-chip companies that can deliver solid income and capital growth.

However, the Margetts fund also comes with a higher price tag than many of its peers, with a total expense ratio of 2.31 per cent. Its AMC is 1.48 per cent, while the initial and additional investment level required is at least £1,000. Monthly savings of at least £100 are also allowed, as is access through an Isa.

The Legal & General Multi Manager Income Trust, meanwhile, has had a far tougher time trying to generate yields from a more adventurous choice of holdings. Its average three-year return of 8.53 per cent lags behind the sector average and puts it in 107th place in the same sector.

The £205.4m fund, managed by Alan Thein and Tim Gardner since 2008, has put its faith primarily in income and bond funds. These have not only looked towards the UK, where 28.15 per cent of the L&G fund’s overall exposure lies, but to Japan (19.84 per cent) the eurozone (12.56 per cent) and European countries outside the eurozone (8.96 per cent).

Its top holding is the £380.34m Nordea-1 Global High Yield Bond fund, typical of the managers’ tendency to pick more daring funds in an attempt to provide high income and some growth.

The L&G fund’s TER is 2.14 per cent while, its AMC is 1 per cent. A minimum of £500 is required to invest in the fund, which is available through an Isa.

Adviser Verdict

Philip Stevenson, chartered financial planner at Greater Manchester-based Ark Financial Planning, said: “We look for risk targeted funds that do not require us to make detailed decisions on specific regions and assets, and this approach has paid off in above-inflation returns so far.”


Margetts Providence Strategy
1. Premier Income - 6.79%
2. Threadneedle UK Equity - 6.72%
3. Newton Asian Income - 6.57%
4. Standard Life European Equities - 6.56%
5. Invesco STIC Sterling Liquidity - 6.46%

L&G Multi Manager Income Trust
1. Nordea-1 Global High Yield Bond - 13.45%
2. JOHCM Japan GBP - 11.49%
3. Artemis Income - 9.65%
4. Henderson European Special Situations - 8.14%
5. Veritas Global Equity Income - 7.04%