fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

TM RWC UK Equity Income R

  • 101.00p
    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.

  • 111.50p
    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?

  • 5.00% 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!

  • 0.65%
    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).

  • 0.86%
    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.

  • 2.90%
    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 30 November 2021, fund data last updated 14 October 2021

The fund aims to deliver a dividend yield more than the FTSE All Share Index, whilst providing long-term capital growth. Managers Ian Lance and Nick Purves look for mainly large-cap UK companies which are trading below intrinsic value and, in addition, have sustainable businesses and are soundly financed. The managers have a bottom-up investment process and look to hold their investments over the long term to take full advantage of their growth. Their holdings include Royal Mail, oil giant BP and broadcaster ITV.

Fund summary

Sector UK Equity Income
Structure OEIC
Launched
Size £396m
Yield 2.90%
Charging basis Capital
Dividends paid 31 May, 31 Aug, 30 Nov, 28 Feb

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Annual management charge 0.65%
Ongoing charges figure 0.86%

Allocation

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Investment process

The managers have two main pillars in their investment process. When it comes to generating new ideas, they look for fundamentally sound companies with a strong balance sheet and quality business model that are part of a healthy sector or market. They also look for stocks trading below their intrinsic value but with growth potential. Lance and Purves also look at core ideas, which means previously out of favour companies but whose fundamentals are improving and are still trading at below intrinsic value such as bank NatWest. The managers believe that looking for intrinsic value reduces investment risk and provides smoother returns. The risks they look to avoid include valuation and paying more for a stock than it is worth, a decline in earnings for cyclical or secular reasons, high debt and Environmental Social and Governance policies which could damage a company’s brand or end up in regulatory actions and fines. They also have a clear exiting process, deciding to offload companies whose share prices have performed well and which are now above intrinsic value.

The managers are very experienced in equity income investing. Both prior to and since the launch of this fund in 2018, they have run the SJP UK Income Fund which has historically delivered significant outperformance. The RWC UK Equity Income fund has also performed strongly in comparison with similar UK large cap, value-oriented income funds. This is despite a market environment which has proved challenging for UK value investors in recent years. Lance and Purves have a strong and clear philosophy, believing that value can lead to greater prospective returns than growth. Their intrinsic value approach is both repeatable and methodical, enabling them typically to avoid value traps given their emphasis on balance sheet strength. This focus on intrinsic value rather than seeking out safe high yielding dividend stocks may however be unappealing to purely income-focused investors. However, this is a strong option for investors wishing to diversify away from popular “quality/growth” strategies.

Manager research

Average monthly relative returns

  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.00%
  • 20/21 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%

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

Track record

Periods of worst performance

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Relative 0.00% ()

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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Sector breakdown

Financials 20.00%
Communications 17.00%
Energy 16.00%
Consumer Discretionary 14.00%
Industrials 11.00%
Materials 9.00%
Information Technology 5.00%
Utilities 4.00%
Money Market 4.00%

Portfolio

The portfolio holds between 25 and 45 stocks with the managers having to invest a minimum of 80% in UK companies.

Key Investor Information - Income

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Key Investor Information - Accumulation

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