Merian UK Equity Income A

Large and mid cap UK income fund with a pragmatic approach.

  • 583.70p
    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.

  • 2436.00p
    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!

  • 1.65%
    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).

  • 1.65%
    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.

  • 5.70%
    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 22 September 2020, fund data last updated 24 September 2015

The fund aims to achieve an above average yield with growth in income and capital appreciation over the long term, by investing primarily in large and mid-cap UK equities.

Fund summary

Sector UK Equity Income
Structure OEIC
Launched September, 1975
Size £53m
Yield 5.70%
Charging basis Capital
Dividends paid 31 Mar, 30 Jun, 30 Sep, 31 Dec

Charges

Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.65%
Ongoing charges figure 1.65%

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Investment process

The manager invests almost entirely in stocks from the FTSE 100 and FTSE 250 indices. He describes his style as pragmatic and he invests in a combination of core income stocks (those with premium dividend yields and good prospects for dividend growth) and core growth stocks (those that can grow profits or are re-rating candidates – there is no yield requirement for these, though they should offer dividend growth). In sourcing stocks Message looks for: - Internal change. This can include new management teams, extensive restructuring or the first positive earnings surprise for some time. Message believes the market is often slow to react to a turnaround in a company that has disappointed for some time. - External change. Companies benefiting from changes that affect an entire industry or the overall economy. - Undervalued quality. Durable businesses where the valuation does not reflect the sustainability of returns. Message periodically checks his portfolio against average peer group exposure - this is to ensure he is differentiated enough to outperform.

In a sector where many of the popular options have grown quite large, this fund benefits from a small size and with the FTSE 350 focus is highly scalable. Performance has been strong, and the fund doesn’t have the small and mid-cap bias of many of the other top performers in the sector, making it more suitable as a core holding.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 0.00%
  • 17/18 -0.15%
  • 18/19 -0.53%
  • 19/20 -0.16%

Bestinvest MRI

  • 3 years -0.28%
  • 5 years 0.00%
  • Career -0.29%
  • 3 years 19.80%
  • 5 years 0.00%
  • Career 13.60%

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

Ed Meier

Meier graduated from Oxford University with a BA Classics and joined Fletcher Advisory in 2000 as a Technology/Strategic consultant. In 2002, he left for BAE Systems to manager their pension fund. He started working at Schroders in January 2006, he joined the Research team as a Pan European analyst covering the European Technology sector. Meier is a CFA charterholder.

Track record

Ed Meier has 3.8 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.29%. During the worst period of relative performance (from December 2016 - July 2020) there was a decline of 13% relative to the index. The worst absolute loss has been 32%.

Periods of worst performance

Absolute -32.00% (December 2019 - March 2020)
Relative -13.00% (December 2016 - July 2020)

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

5.1% Drax Group Plc
5% Glaxosmithkline
4.7% Diversified Gas & Oil Plc
3.3% Royal Dutch Shell Plc
3.1% Tesco
3.1% Astrazeneca Plc
3.1% Bp
3% Glencore Plc
3% Sse Plc
2.9% Pets At Home Group Plc
Source: Trustnet

Sector breakdown

Financials 21.00%
Consumer Services 18.00%
Oil & Gas 11.00%
Industrials 10.00%
Utilities 9.00%
Consumer Goods 9.00%
Health Care 8.00%
Basic Materials 8.00%
Technology 3.00%
Telecommunications 3.00%

Portfolio

40-60 stocks.

Key Investor Information - Income

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Key Investor Information - Accumulation

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