The UK equity income funds paying the highest income are not necessarily the ones you should turn to for long-term returns, reports deputy personal finance editor Kate Beioley. She mines three recent reports on the top UK equity income funds to explain why this is the case and what you should consider when choosing one of these funds. She also highlights some of the UK equity income funds worth consideration, and how you should go about selecting these.
OTHER STORIES IN THIS ISSUE
This week's tip also highlights a fund which offers an attractive yield, but which is also less sensitive to rising interest rates and inflation. The fund has already demonstrated its ability to deliver strong returns and - crucially - has a flexible mandate meaning it can both seize opportunities and avoid bad areas making it less risky than some other higher yielding funds.
Scottish Mortgage Investment Trust's (SMT) strong returns have resulted in substantial growth of its market-cap meaning it will soon ascend to the FTSE 100, the index of the UK's largest listed companies. And in recognition of its increasing economies of scale the trust is to reward its shareholders with a management fee cut which could result in a drop in its ongoing charge – already one of the lowest among investment trusts.
It's not how much a share grows but how much you pay for it that will be the biggest driver of returns – or so argue Nigel Waller and Andrew Goodwin, portfolio managers at value specialists Oldfield Partners. They tell personal finance writer Emma Agyemang what the key to value investing is and how to run a value portfolio, but also why you need a strong stomach to do this.
In her monthly column on the Markets and Your Money Kate Beioley looks at why certain markets have reached fever pitch, and which shares, sectors and funds were February's winners and losers. She also highlights an area that looks attractive and set to deliver good returns, as well as some funds with which to tap into these potential gains.
Renowned Asia manager Angus Tulloch is to retire from Stewart Investors in September 2017, ending a 29-year career at the fund house and his management of top-performer Stewart Investors Asia Pacific Fund (GB0030183890). Kate Beioley explains why despite his departure investors in this fund and other mandates he has been involved with can still expect good returns going forward.
In our special Isa podcast the personal finance team look at how to get the best out of your Individual Savings Account (Isa) for your saving and investing goals, and are joined by Sarah Lord, board director of the Personal Finance Society. Kate Beioley also explains what type of Isa you should opt for, while Emma Agyemang sets out her tips on how to set up an Isa in the most cost efficient way.
Our podcast is now available across five different distribution channels to allow you to access it in the most convenient way. Find us on Soundcloud, Acast, Audioboom, Stitcher and iTunes.
This week's Portfolio Clinic features an investor who wants a return of 5 per cent a year from his portfolio of investment trusts, to build up a retirement pot. Our experts explain why his portfolio is not as well diversified as it should be, and offer some suggestions on how to improve the allocation and good funds with which to do it.
Do you have a personal finance problem? Or want to know more about something in this week's personal finance pages? If so let us know by getting in touch with leonora.walters@ft.com, kate.beioley@ft.com or emma.agyemang@ft.com.
