Fund review: Tilney Bestinvest British Enhanced Income

Fund review: Tilney Bestinvest British Enhanced Income

Tilney Bestinvest has launched a new multi-cap multi-asset fund to be managed by Gareth Lewis, its chief investment officer.

The British Enhanced Income (BEI) fund is aimed at those approaching or at retirement with the aim of maximising income while managing risk.

Mr Lewis will take a multi-cap approach, investing 50 per cent in equities, 34 per cent in fixed income and the remaining in property, absolute return and cash. Asset allocation is shown in the Chart. UK-based investors will be the primary target reflecting the aim of producing income in sterling, as well as reducing currency risk. The fund will be available on Cofunds, Pershing and SEI with more platforms to be added. It has a minimum investment of £1,000 (£500 through a platform), with an AMC of 0.75 per cent.

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After the recent acquisition of Ingenious Asset Management, the start of 2016 has been eventful for Tilney Bestinvest. This has coincided with the launch of a new Advanced Passive Portfolio fund range, which it says is designed to deliver low cost “core investment solutions”.

Income could be one of the biggest drivers this year with uncertainty around market growth lingering. This fund may appeal to those who are comfortable with income-producing equity investments, but remain concerned about the foreseeable future.

Although aimed at retirees, it may also prove appealing to those who believe high yielding income funds could provide the best opportunity to supplement growth.

At launch, the firm says 80 per cent of the fund will be invested in the UK market with the remaining 20 per cent split between Europe and North America. It is initially expected to invest in around 18 holdings, mostly made up of active funds.

Performance will be largely reliant on the UK, but the reduction in currency risk especially with many global markets faltering, may provide additional security to investors. Although the manager will take a multi-cap approach, 80 per cent of the fund will focus on large-caps, which may cushion the risk but also limit growth potential.