Two managers of major UK equity income funds are to step down from the running of their funds. Anthony Nutt, manager of the £1.95bn Jupiter Income Trust (ISIN: GB0004791389) and High Income funds is to hand over their management ahead of his retirement in 2014. When Mr Nutt took on the Jupiter Income Trust in 2000 he initially had great success but over the past few years performance has suffered badly (read more on this). As a result, a co-manager, Philip Matthews, was appointed in March last year.
But on 1 January Ben Whitmore, who currently runs Jupiter UK Special Situations Fund, will take over the Jupiter Income Trust. Since Mr Whitmore took on Jupiter UK Special Situations in November 2006 it has returned 41.4 per cent against 15.7 per cent for the IMA UK All Companies sector average, placing it 22nd out of 237. He also manages institutional mandates with a special situations and income bias.
Darius McDermott, managing director of Chelsea Financial Services says: "We've had Jupiter Income Trust on a 'hold' rating for a while now. We'll meet Mr Whitmore in the next few weeks to talk about how he will manage the fund going forward, but based on previous meetings and performance, I imagine we will promote the fund to a 'buy' in the new year."
Mr Matthews, who will remain deputy manager of Jupiter Income and manager of the Jupiter Growth & Income, will become lead manager of Jupiter High Income on 1 July 2013.
Mr Nutt will continue to manage the Jupiter Dividend & Growth Investment Trust.
Read our interview with Mr Nutt
Meanwhile, Newton Investment Management has removed Tineke Frikkee as manager of the £2.24bn Newton Higher Income Fund (ISIN: GB0006779218). This fund has been in the lowest 25 per cent of UK Equity Income sector funds over one and three years in terms of total return.
Richard Wilmot, manager of the Newton UK Equity Fund, has been named new lead manager, and the fund's buy and sell discipline will be broadened from buying at 115 per cent of market yield and selling at the market yield, to buying at 75 per cent of the market yield and selling at 50 per cent of the market yield. The fund's yield will be reduced progressively over 18 months with the aim of meeting at least a 10 per cent premium per year to the FTSE All-Share yield over rolling three year periods. Newton believes this will grow the dividend over the long-term from this new level and provide an attractive total return.
Performance of Jupiter and Newton funds vs FTSE All-Share exchange traded fund
| Fund | 2008 | 2009 | 2010 | 2011 | 2012 to date | Yield (%) | Total expense ratio (%) |
Jupiter Income Trust Inc | -27.3% | 14.8% | 9.3% | -0.2% | 7.8% | 5.07 | 1.69 |
| Newton Higher Income GBP | -20.4% | 14.1% | 8.2% | 0.1% | 8.6% | 6.15 | 1.61 |
| db x-trackers FTSE All Share GBP | -29.6% | 29.3% | 14.4% | -4.0% | 10.8% | 2.88 | 0.40 |
Source: Morningstar as at 12 December 2012, *Financial Times as at 11 December.
