Equity income investors have been hit hard by the pandemic as many UK companies reduced or passed their dividends in 2020, making the search for yield even more perilous.
Fortunately, Sanlam’s Income Study provides a timely guide to the best and worst funds based on a long-term quantitative analysis of past performance and consistency of income.
The study, which has been running for over 30 years, dissects the 58 income funds in the investment association equity income sector into the best and worst performers.
TOP INCOME FUNDS
The best performers make the study’s White List and over the last six months, the Santander Enhanced Income Fund (B3RJG57) reached top spot, moving up from second in July 2020.
Sanlam said managers Graham Ashby and Duncan Green have proved their worth in recent periods while delivering alpha against peers in 2020 following a good return profile in 2019 (ranked seven out of the funds in the universe).
Alpha is a measure of risk adjusted returns which includes volatility. Lower volatility indicates a more consistent fund performance.
The Robin Geffen-managed Liontrust Income Fund (B8JCR45) made it into second spot, and while it doesn’t rank first on any single metric, Sanlam notes its consistent performance across all performance criteria.
Moving up into the White List were the Threadneedle UK Equity Income Fund (B888FR3), the Lazard Multi-Cap UK Income Fund (0847025) as well as Allianz UK Equity Income (B82ZGC2).
THE BLACK-LIST
The Slater Income Fund (BYV2HQ7) has not improved its position on the Black-List, which is attributed to poor performance in the last couple of years and fourth quartile volatility versus peers.
The Marlborough UK Multicap Income Fund (B42TBF45) has continued to drop against peers for the third Study in a row driven by a poor selection in small and mid-cap equities detracting performance returns and increasing the volatility against peers.
Other laggards which make the list again include the Liontrust Macro Equity Income Fund (B7MVBY0), the Schroder Income Fund (B3PM119), and the M&G Dividend Fund (B7BX4821).
