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Evenlode Income

Elite Rated by FundCalibre

Evenlode Income is a highly concentrated fund of quality companies. Hugh Yarrow, lead manager, and Ben Peters, co-manager, believe the market fundamentally underestimates the value of high quality businesses because of its obsession with short-term factors. As a result, the fund aims to take a much longer view than is typical of most funds today.

Company Description

Evenlode Investment is an independent, equity-focused investment firm. The firm’s philosophy is to build lasting relationships with clients, investing their capital for the long term in stable, high-quality businesses. They exclusively seek out companies that have few physical assets, generate high levels of free cash flow, and consequently generate consistently attractive returns on capital. Evenlode is owned by its employees as part of the Wise Group.


Fund Manager

Hugh Yarrow graduated from Edinburgh University with a first class degree in philosophy and Mathematics. From 2002 to 2009 he managed several equity income funds for Rathbone. He joined Wise in 2009 and launched the Evenlode Income fund in October 2009.


As the name of the fund, Evenlode, suggests I like all the companies we own to contribute to returns and for the power of economic compounding to do the heavy lifting

Hugh Yarrow - Fund Manager

The Investment Process

They only invest in high quality cash generative businesses with sustainable returns. They avoid businesses with high capital expenditure and will never own miners or oil and gas producers. The fund takes a long-term view; turnover is typically less than 20%. They construct a universe of high quality stocks before using a Discounted Cash Flow analysis to determine which valuations are cheapest.


The fund aims to produce excess returns with reduced risk. The fund reduces volatility by investing in high quality defensive businesses. We expect the fund to outperform in down markets and underperform in a strongly rising market. The fund is highly concentrated, with its top 10 holdings making up 55% of the fund. These businesses’ revenue streams are extremely well diversified helping to reduce any stock-specific risk.

Our Opinion

This concentrated fund is not afraid to radically depart from its benchmark and ignore entire sectors. The investment process is extremely well defined. It is based on the simple, but effective, idea that over the long run quality will outperform and its high conviction long-term approach is refreshing to see. The fund’s universe is relatively small, although this is somewhat mitigated by investing in some overseas stocks.

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