BNY Mellon UK Income

A large and mid-cap UK equity income fund.

  • 60.00p
    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.

  • -
    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?

  • 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!

  • 1.50%
    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).

  • 1.61%
    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.

  • 3.90%
    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 24 November 2020, fund data last updated 19 May 2014

The fund aims for income and capital growth over the long-term by investing in shares (i.e. equities) and similar investments of UK companies. Some overseas stocks may also be included. The fund invests primarily in large and mid-sized companies and has a target yield of at least 10% above the UK stockmarket (FTSE All-Share) – to this end stocks are selected using strict yield criteria. The portfolio also reflects the input of Newton’s strategy team, who aim to identify long term economic themes.

Fund summary

Sector UK Equity Income
Structure OEIC
Launched June, 1987
Size £952m
Yield 3.90%
Charging basis Capital
Dividends paid 28 Feb, 31 May, 31 Aug, 30 Nov

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.61%

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Investment process

The fund’s investment universe comprises all of the companies in the FTSE All-Share, but in practice the portfolio is almost entirely made up of large and mid-cap stocks due to liquidity. Selected overseas companies are also included. The universe is further restricted to around 150 companies by the fund’s strict yield criteria – only stocks yielding at least 75% of the FTSE All-Share Index yield can be included, whilst any portfolio company whose yield drops below 50% of the index must be sold. The entire stock selection process is informed by Newton's macro-strategy group, which attempts to identify long term themes incorporating economic, demographic, political, technological, and other macro forces affecting global markets. Analysts and managers focus their research on companies which will benefit from these trends. The portfolio is partly derived from the Newton UK equity team’s model portfolio, which is in turn derived from the recommendations of Newton's London based global sector analysts. The fund will typically have 50-60% overlap with the UK model, with the remainder comprising other high yielding stocks in the universe selected by the fund manager. However, he will always research these in conjunction with the analyst team.

Though this is a UK fund, Newton’s analysts look at stocks globally, an important attribute when an increasing number of companies operate internationally. Both the fund manager and analysts benefit from themes identified by Newton’s strategy team – for instance, the team was negative on western banks well in advance of the 2008 financial crisis. This, in addition to the yield constraints, typically provide a degree of protection from falling markets but can lead to the fund underperforming strongly rising markets.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 -0.30%
  • 17/18 -0.12%
  • 18/19 0.39%
  • 19/20 0.13%

Bestinvest MRI

  • 3 years 0.13%
  • 5 years 0.00%
  • Career 0.03%
  • 3 years 91.30%
  • 5 years 0.00%
  • Career 85.10%

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

Christopher Metcalfe

Metcalfe was born in 1960 and has a degree in Modern History as well as an MBA from Manchester Business School. His investment career commenced in 1985 at Henderson Adminstration Group, where he ultimately became Head of UK Equities. He joined Schroders in 1994, becoming a UK Equity fund manager for a number of their largest client portfolios, head of the Core UK Equity Team and an Executive Director. In 2006 he joined Newton as a Director in the UK Equity Team.

Track record

Christopher Metcalfe has 11.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.03%. During the worst period of relative performance (from February 2009 - January 2018) there was a decline of 28% relative to the index. The worst absolute loss has been 26%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 85%.

Periods of worst performance

Absolute -26.00% (December 2007 - March 2009)
Relative -28.00% (February 2009 - January 2018)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

4.96% Glaxosmithkline
4.62% Unilever
4.25% Diageo
4.07% Bae Systems
3.89% Smiths Group
3.86% British American Tobacco
3.85% Imperial Brands Plc
3.66% Relx Nv
3.26% Informa Plc
3.14% Sanofi
Source: Trustnet

Sector breakdown

Consumer Goods 20.00%
Industrials 18.00%
Financials 18.00%
Consumer Services 13.00%
Health Care 10.00%
Oil & Gas 7.00%
Utilities 5.00%
Technology 4.00%
Basic Materials 3.00%
Telecommunications 2.00%

Portfolio

c. 60 stocks. Tracking error would typically range from 2% to 5% over the long term.

Key Investor Information

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