Five equity income funds to boost your portfolio
There are many reasons people invest for income. Some need help to pay their bills, while others...
The 21st century didn’t have a very auspicious start for the investment world. It began with the technology bubble bursting, and stock markets plunging almost 50%* over the next two and a bit years.
Since then we’ve had two bear markets, two bull markets, five Prime Ministers (possibly six by the end of the week), a global financial crisis, Bitcoin rose to fame – before falling from grace quite spectacularly (around 80%** peak to trough) – China became a major stock market, and the UK voted to leave the European Union.
On 31 December 1999, the FTSE 100 stood at just under 7,000 points. Twenty years later it is just over 7,200***. That’s a capital return of just 4.1%^.
Thankfully there are two things that could have made it a more profitable couple of decades for investors: dividends and active management.
If a passive investor in a FTSE 100 tracker had reinvested dividends, they would have received a much healthier return of 116.3%^^, for example.
If an investor had put their money in the best performing actively managed investment trust at the turn of the millennium – TR Property Investment Trust – they would have enjoyed returns of 1,766.8%^^. An investment in the best performing open-ended fund – Marlborough Special Situations – would have been rewarded with returns of 1,108.3%^^.
As we come to the end of the second decade of the millennium, we thought we’d find out which Elite Rated managers have been the most consistent throughout the century so far.
Of the some 4,550 plus funds and trusts in the IA and IT sectors, less than 3% of managers have a tenure spanning 20 years or more***, and FundCalibre only rates up to 10% of funds in any sector, so it is a very select group.
There are 11 Elite Rated funds and trusts on FundCalibre that have had the same managers at the helm for 20 years or more. An impressive eight have outperformed their sector peer groups in 13 or more of the past 20 calendar years – or more than two-thirds of the time.
The most consistent has been Jonathan Platt, manager of Royal London Corporate Bond fund, who has outperformed in 17 out of 20 calendar years, producing cumulative returns of £2,848^^^. He is followed by John Chatfeild-Roberts on the Jupiter Merlin Growth Portfolio. The figures are after charges have been taken out.
The most money has been made by Giles Hargreave, manager of Marlborough Special Situations, who has turned £1,000 into £12,083^^^, while in second place, Anthony Cross of Liontrust UK Smaller Companies has turned £1,000 into £7,537.83^^^. Again, these figures are after charges.
These managers really are the cream of the crop.
|Fund/Trust||Manager||Calendar year sector outperformance||£1,000 invested||Cumulative performance||Cumulative sector average performance|
|Royal London Corporate Bond||Jonathan Platt||85%||£2,848.02||184.80%||145.99%|
|Jupiter Merlin Growth Portfolio||John Chatfeild-Roberts||80%||£4,199.22||319.92%||117.67%|
|EdenTree Amity UK||Sue Round||70%||£3,359.18||235.92%||146.11%|
|Rathbone Income||Carl Stick||70%||£4,797.52||379.75%||210.27%|
|Liontrust UK Smaller Companies||Anthony Cross||70%||£7,537.83||653.78%||357.32%|
|Marlborough Special Situations||Giles Hargreave||70%||£12,083.44||1108.34%||357.32%|
|Lowland Investment Company||James Henderson||67%||£6,562.06||556.21%||229.18%|
|Invesco Corporate Bond||Paul Causer||65%||£2,961.95||196.20%||145.99%|
*Source: FE Analytics, total returns in sterling, 31 December 1999 to 12 March 2003
**Source: Bitcoin price chart in US dollars, 15 December 2017 to 14 December 2018
***As at 11 December 2019
^Source: FE Analytics, price returns in sterling, 31 December 1999 to 11 December 2019
^^Source: FE Analytics, total returns in sterling, 31 December 1999 to 30 November 2019
^^^Source: FE Analytics, total returns in sterling for £1,000 invested, 31 December 1999 to 30 November 2019