The final stage is portfolio construction, where they target a minimum of a 2 per cent yield from each company at point of entry and will compile the portfolio with diversification in mind. Stocks are weighted between 1 per cent to 3 per cent, making for a reasonably flat portfolio.
As the team perform extensive research on stocks in a market which is difficult to yield, it is important that every name in the 80-110 stock portfolio should contribute without too much reliance on any one holding. Largest positions at present include Bank of America (2.8 per cent) and Johnson & Johnson (2.7 per cent).
The fund has done well in markets driven by fundamentals, where quality companies have been rewarded.
It has also held up in volatile markets due to its more conservative nature. In the past 10 years it has returned 236.5 per cent to investors and has a yield of 2.46 per cent. It has an ongoing charge of 0.79 per cent.
This fund ticks a lot of boxes and has an experienced manager backed by one of the strongest analyst teams around.
It is an ideal candidate to take advantage in uncertain times having demonstrated its ability to achieve an income, while also participating in long term capital growth.
Darius McDermott is managing director of FundCalibre