Troy Trojan Income, an IC Top 100 Fund, tops the list of best UK equity income funds in wealth manager Principal Investment Management's latest survey of the sector.
Principal's 2012 Income Study Mid-Year Review aims to highlight UK equity income open-ended investment companies and unit trusts with a track record of delivering a rising level of income and long-term capital growth, alongside carefully managed risk. The latest instalment of the survey picks out 14 of these funds which it believes are worth holding.
This 'White List' include Threadneedle UK Equity Income (this week's fund tip) and sister funds UK Equity Alpha Income and UK Monthly Income. "The Threadneedle UK equity team, led by Leigh Harrison, has again successfully navigated through difficult markets and it remains one of the best teams in the sector," says Principal.
The White list includes the equity income fund with the top total return over one year, Cazenove UK Equity Income, which is also among the top ten performers over three and five years. Together with these strong returns it has an attractive yield of 4.2 per cent.
Next up is Royal London UK Equity Income run by Martin Cholwill, who gets his returns by looking for companies that use excess cash for growing their dividends and are potential acquisition targets.
The list also includes highly regarded manager Neil Woodford's Invesco Perpetual High Income Fund, which is among the top performers in the UK equity income sector. It does not include IC Top 100 Fund Edinburgh Investment Trust, also run by Mr Woodford, because this survey only covers open-ended funds.
Principal Investment Management White List
| Fund | Net dividend yield as at 29/06/12 (%) | Total return 30/06/11 to 29/06/12 (%) | Total return 30/06/10 to 30/06/11 (%) | Total return 30/06/09 to 30/06/10 (%) | Total expense ratio (%)* |
| Troy Trojan Income | 4.5 | 8.9 | 23 | 16.1 | 1.05 |
| Threadneedle UK Equity Income | 4.2 | 2 | 26.7 | 18.6 | 1.62 |
| RBS Equity Income | 4.7 | 2.7 | 26 | 22.3 | 1.32 |
| Threadneedle UK Equity Alpha Income | 4.5 | 2.9 | 26.8 | 15.8 | 1.62 |
| Cazenove UK Equity Income | 4.2 | 5.2 | 27.1 | 21.4 | 1.6 |
| Royal London UK Equity Income | 4.3 | 2.1 | 28.9 | 22.5 | 1.32 |
| Threadneedle UK Monthly Income | 4.4 | 2.2 | 25.2 | 20.3 | 1.62 |
| Artemis Income | 4.9 | 3.1 | 19.8 | 19.4 | 1.54 |
| Aviva Investors UK Equity Income | 4.2 | 1.9 | 24.3 | 20.7 | 1.61 |
| JO Hambro UK Equity Income | 5.2 | 0.8 | 29.1 | 24.6 | 1.33 |
| St James’s Place UK High Income | 3.9 | 4.6 | 16.1 | 15.9 | 1.83 |
| Franklin UK Equity Income | 4.2 | 2.9 | 24.5 | 16.7 | 1.62 |
| Fidelity MoneyBuilder Dividend | 4.6 | 7.9 | 20.1 | 19.6 | 1.22 |
| Invesco Perpetual High Income | 4 | 7.9 | 19.8 | 16.7 | 1.69 |
Source: Principal Investment Management, *Morningstar.
