Threadneedle Global Equity Income Fund is among the top yielding funds in the Investment Management Association's (IMA) global growth sector, currently offering in excess of five per cent. That may be because up to a third of its portfolio can be invested in bonds, as well as derivatives and cash. A bond - issued by mining group Talvivaara - is among its top ten holdings.
Total return performance is reasonably strong, so that the fund sits in the first quartile of its sector over one and three years, ahead of many growth focused funds. Threadneedle Global Equity Income aims to achieve a high and growing income over the long-term combined with prospects for capital growth.
The fund has a heavy allocation to Asia ex-Japan, more than a quarter of the fund at the end of July, and its manager Stephen Thornber commented that it has recently benefited from its Asian stocks. The fund's other substantial geographic exposure is north America, also around a quarter of the fund.
The initial charge on the fund at 3.75 per cent is lower than a number of other open-ended funds, which often charge between four and five per cent.
Although a global fund, Threadneedle Global Equity Income has a substantial portion of its assets in the UK - nearly 18 per cent at the end of July. This included exposure to BP, though the fund has now divested of this stock as BP will not pay a dividend until 2011.
The fund's manager, Mr Thornber, has worked at Threadneedle since 1994 where he runs three other funds and is head of the global oil sector research team.
THREADNEEDLE GLOBAL EQUITY INCOME FUND Inc (ADGEIN) | |||
|---|---|---|---|
| PRICE | 91.12p* | SHARPE RATIO | -0.13 |
| SIZE OF FUND | £23.8m | 6 MTH PERFORMANCE | 2.76%* |
| No OF STOCKS | 89 | 1 YR PERFORMANCE | 20.09%* |
| SET UP DATE | June 2007 | 3 YR PERFORMANCE | 2.22%* |
| MANAGER START DATE | June 2007 | TOTAL EXPENSE RATIO | 1.7%* |
| FEES | Initial 3.75%, annual 1.5% | YIELD | 5.06%* |
| RELATIVE VOLATILITY | 1.66 | MINIMUM INVESTMENT | £2,000 |
| TRACKING ERROR | 5.84% | MORE DETAILS | www.threadneedle.com |
Source: Threadneedle, *Morningstar.
Performance as at 3 September 2010.
Top ten holdings as at 31 July 2010
| Holding | Percentage |
|---|---|
| HTC Corp | 3.00 |
| BP Prudhoe Bay Royalty Trust | 2.40 |
| Chunghwa Telecom | 2.20 |
| Pearson | 2.20 |
| Vodafone Group | 2.00 |
| Merck & Co | 2.00 |
| Admiral Group | 1.90 |
| DBS Group Holdings | 1.90 |
| Kinder Morgan Energy Partners | 1.80 |
| Talvivaara mining 5.25 20/05/2013 | 1.80 |
Sector Breakdown as at 31 July 2010
| Sector | Percentage |
|---|---|
| Financials | 19.70 |
| Telecom Services | 12.70 |
| Consumer Staples | 12.30 |
| Information Technology | 9.30 |
| Utilities | 7.90 |
| Health Care | 7.70 |
| Energy | 6.90 |
| Materials | 5.80 |
| Consumer Discretionary | 5.60 |
| Industrials | 4.90 |
| Other | 4.5 |
| Cash | 2.7 |
