ASI UK Income Unconstrained Equity R

Following a review of the funds in the UK Equity Income sector, we have removed the ASI UK Equity Income Unconstrained fund from our top-rated funds list.

  • 47.70p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 78.62p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 4.00% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.80%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.90%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 4.70%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 17 February 2020, fund data last updated 19 April 2016

The fund targets income and some capital growth by investing in a multi-cap portfolio of UK equities. Manager Thomas Moore follows Standard Life’s “Focus on Change” investment philosophy, relying on his and the UK team’s ability to forecast earnings surprises ahead of the market. Moore has a greater focus on dividend and earnings growth compared to rival funds, something that leads him to have substantial weights in mid and small-cap stocks and lower exposure to the traditional FTSE 100 income names.

Fund summary

Sector UK Equity Income
Structure OEIC
Launched February, 2007
Size £1,226m
Yield 4.70%
Charging basis Capital
Dividends paid 28 Feb, 30 Jun

Charges

Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.80%
Ongoing charges figure 1.90%

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Investment process

The manager sits in Standard Life’s UK equity team and almost all his stocks are buy-rated by the team’s analysts, with their best ideas “Winners List” a particular focus. However, Moore is his own analyst on financials and small cap ideas. The team follows Standard Life’s “Focus on Change” investment philosophy, looking to identify changes in companies and industries ahead of the market and hence that haven’t been priced in. This should enable portfolio companies to grow their earnings and also benefit from positive sentiment, growing their earnings multiples. On this mandate the manager also has a focus on dividend growth. He believes the largest dividend paying stocks in the UK often have poor earnings and dividend growth prospects and are therefore unattractive investments. He focuses his research further down the market cap scale, particularly in the FTSE 250, to find stocks that have an attractive yield but where there is scope for earnings and dividend growth. This open-ended fund is run almost identically to the Standard Life Equity Income Investment Trust.

Whilst 'megacap' businesses might pay large dividends now, the manager believes the superior growth prospects of mid and small-cap companies generally make them better investments in the long term. Since he took over the fund in 2009 this has proven to be true, with longer term performance in excess of the benchmark. This more aggressive approach places significant emphasis on Moore’s stockpicking ability, but he benefits from the support of experienced team based in Edinburgh. The fund tends to be more volatile than its peers. Following a review of the funds in the UK Equity Income sector, we have removed the ASI UK Equity Income Unconstrained fund from our top-rated funds list.

Manager research

Average monthly relative returns

  • 15/16 0.36%
  • 16/17 -1.08%
  • 17/18 0.40%
  • 18/19 -0.33%
  • 19/20 -0.66%

Bestinvest MRI

  • 3 years -0.20%
  • 5 years -0.26%
  • Career 0.17%
  • 3 years 35.90%
  • 5 years 30.50%
  • Career 91.60%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Thomas Moore

Moore is an investment director on Standard Life’s UK Equities team as well as analyst for the banking and financial services sectors. He joined the company in 2002, initially working as an analyst before moving to the Emerging Markets equity team in 2003, where he managed EMEA portfolios. He became an investment director in 2005 and then moved to the UK Equities team in 2006. Before joining Standard Life he worked for Schroders in UK equities and emerging markets from 1998. Moore gained a BA (Hons) in economics & politics from Exeter University in 1998, and is also an associate of the CFA Society of the UK.

Track record

Thomas Moore has 11.1 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.17%. During the worst period of relative performance (from December 2015 - August 2019) there was a decline of 28% relative to the index. The worst absolute loss has been 17%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 92%.

Periods of worst performance

Absolute -17.00% (April 2011 - September 2011)
Relative -28.00% (December 2015 - August 2019)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 30 November 2019

5.2% John Laing Group Plc
4.5% Royal Dutch Shell
3.6% National Express Group
3.5% Close Brothers Investment
3.4% Bp
3.4% Gvc Hldgs Plc
3.2% Glaxosmithkline
3% British American Tobacco
2.8% Ashmore Group Plc
2.8% Aviva
Source: Trustnet

Sector breakdown

Financials 39.00%
Oil & Gas 16.00%
Industrials 14.00%
Consumer Services 12.00%
Consumer Goods 8.00%
Basic Materials 4.00%
Utilities 4.00%
Health Care 3.00%

Portfolio

30-60 stocks.

Constraints

Typical 1-5% in a single stock. Max 30% in one sector. Max 5% cash. VP 07.30.

Key Investor Information - Income

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Key Investor Information - Accumulation

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