The research highlighted the IMA UK Equity Income funds that are most held in managers’ top-10 holdings.
FE Alpha Manager Adrian Frost’s £4.6bn portfolio was the overwhelming favourite, appearing 52 times. The second most popular – JOHCM UK Equity Income – was well behind, appearing 22 times.
Most popular funds in sector
| Name | Number of funds that hold it | AUM (£) |
|---|---|---|
| Artemis Income | 52 | 4.6bn |
| JOHCM UK Equity Income | 22 | 1.4bn |
| Invesco Perp Income | 20 | 9.0bn |
| Threadneedle UK Equity Income | 20 | 1.7bn |
| Invesco Perp High Income | 19 | 11.8bn |
| Psigma Income | 12 | 367m |
| Stan Life Inv UK Equity Income Unconstrained | 11 | 112m |
| Trojan Income | 11 | 931m |
| Schroder Income Maximiser | 9 | 828m |
| Stan Life Inv UK Equity High Income | 9 | 655m |
Source: FE Analytics
A recent FE Trustnet article revealed that a number of industry experts count Artemis Income as their favourite UK Equity Income giant, and fund managers are of a similar opinion.
FE Alpha Manager Julian York’s HSBC Income Fund of Funds counts the Artemis portfolio as its third-largest holding.
Artemis Income is also a top-10 holding in Margetts Providence Strategy – which is headed up by FE Alpha Manager Toby Ricketts.
Bill McQuaker – who was a recent addition to the FE Alpha Manager rankings in this year's rebalancing – holds Artemis Income in both of his Henderson Multi Manager Income & Growth and Henderson MultiManager Active funds.
Launched in 2000, Artemis Income has beaten both its IMA UK Equity Income sector average and its benchmark – the FTSE All Share – over one, three, five and 10 years.
According to FE Analytics, the fund – which is currently yielding 4.2 per cent – is the sixth-best performing fund in the sector over the last decade, with returns of 205.8 per cent.
Performance of fund vs sector and index over 10yrs
Source: FE Analytics
Artemis Income has beaten the index by 33.93 percentage points over that time and has been considerably less volatile than both the sector and its benchmark.
Multi-billion pound funds dominate the top-10 most popular UK Equity Income funds among fund managers.
FE Alpha Manager Neil Woodford’s Invesco Perpetual Income and High Income portfolios are high on the list – appearing in the top-10 of 20 and 19 portfolios, respectively.
The five crown-rated portfolios have combined assets under management (AUM) of more than £20bn.
JOHCM UK Equity Income and Threadneedle UK Equity Income also have more than £1bn AUM, although they are much smaller – and therefore more flexible – than Artemis Income and the two Invesco Perpetual funds.
A recent article highlighted JOHCM fund as a fund that has a consistent record of outperforming in both up and down markets.
Francis Brooke’s five crown-rated Trojan Income fund is another popular choice with fund managers.
FE Trustnet reported earlier this month that the £1bn portfolio is to be closed to new investors from 1 May – frustrating news for advisers who had Trojan Income on their shopping list.
Trojan Income was launched in September 2004 and over that time it has returned 103.61 per cent, making it a top-quartile performer.
It has also been significantly less volatile than both its sector and benchmark.
Performance of fund vs sector and index since launch
Source: FE Analytics
Eleven funds of funds currently count Trojan Income as a top-10 holding, including FE Alpha Manager David Coombs’ Rathbone Multi-Asset Total Return Portfolio.
Trojan Income is Coombs’ largest individual holding, with a 6.28 per cent weighting.
Another favourite holding among fund-of-funds managers is FE Alpha Manager £367m Bill Mott’s Psigma Income fund.
In spite of its underperformance since launch, it is the sixth-most popular UK Equity Income fund among industry professionals, appearing in the top-10 of 12 funds.
One of those is the five crown-rated Premier Multi Asset Distribution, which has 4.7 per cent of its AUM in the fund.
Thomas Moore’s Standard Life UK Equity Income Unconstrained fund is the smallest on the list.
Unlike most of the others, the £112m portfolio has a mid cap bias and counts companies such as Cineworld and EasyJet as top-10 holdings.
Unicorn UK Income is the best-performing vehicle in IMA UK Equity Income over the last three and five years, but only appears in the top-10 holdings of two funds of funds in the sector – Margetts Opes Income and CF Lacombs World.
In the next article in the series, FE Trustnet will look at the most popular UK growth portfolios among fund-of-funds managers.