IC Top 100 Fund TB Evenlode Income (GB00BD0B7D55) is to soft close to new investors, but will still be available on investment platforms. From 1 May, subject to confirmation by the Financial Conduct Authority (FCA), the fund will charge an initial fee of 5 per cent to new investors.
However, platforms that currently sell TB Evenlode Income will be able to continue to sell it without this charge. These include: AJ Bell Youinvest, Alliance Trust Savings, Bestinvest, Charles Stanley Direct, Chelsea Financial Services, Fidelity Personal Investing, Halifax Sharedealing, Hargreaves Lansdown, Interactive Investor and The Share Centre. See the online version of this article at www.investorschronicle.co.uk for a full list of the platforms that sell TB Evenlode Income.
The fund, which is about £2bn in size, is soft closing to manage capacity. "This does not reflect any short or medium-term liquidity concerns," explains Hugh Yarrow, manager of TB Evenlode Income. "Doing this allows us to prioritise and maintain relationships with our existing investors, while managing the assets already entrusted to us most effectively, and staying true to our investment strategy and process."
Darius McDermott, managing director at Chelsea Financial Services, adds: "This change indicates that the managers do not want to take further big flows into the fund but [will continue to] take small daily flows from private investors. They have always been clear about the size the fund could be run at."
Mr Yarrow and co-manager Ben Peters invest in asset-light companies that have high returns on capital and strong free cash flow. They focus on sustainable dividend growth rather than delivering the highest yield. As a result, two years ago the fund failed to meet the Investment Association (IA) UK Equity Income sector minimum yield requirement of 10 per cent over what the FTSE All-Share index yields. It is now in the IA UK All Companies sector because Mr Yarrow and Mr Peters do not want to change their investment process and chase a higher yield.
TB Evenlode Income currently yields 2.6 per cent and has steadily increased its dividend over the past five years. It has also delivered very good total returns, beating the FTSE All-Share index over one, three and five years, and the IA UK All Companies sector average over three years and five years.
| Fund/benchmark | 1-year total return (%) | 3-year cumulative total return (%) | 5-year cumulative total return (%) |
| TB Evenlode Income | 5.3* | 34.5* | 75.4* |
| IA UK All Companies sector average | 5.8 | 21.0 | 47.1 |
| FTSE All-Share index | 4.1 | 20.3 | 39.9 |
Source: Morningstar as at 10/03/18. *Performance is that of an older share class rather than the one highlighted in the text.
The fund has a relatively concentrated portfolio of around 40 holdings and can invest in companies of all sizes. Almost two-thirds of the portfolio is in large-caps with the rest in mid-caps.
Top 10 holdings as at 28/02/18 (%)
| Unilever | 7.9 |
| Diageo | 7.5 |
| Sage Group | 4.8 |
| Compass Group | 4.6 |
| Smiths Group | 3.7 |
| Fidessa Group | 3.2 |
| AstraZeneca | 3.1 |
| GlaxoSmithKline | 3.1 |
| Informa | 2.9 |
| Microsoft | 2.8 |
Source: Evenlode
Sector breakdown as at 28/02/18 (%)
| Consumer goods | 28.9 |
| Technology | 16.7 |
| Media | 14.6 |
| Healthcare | 12.2 |
| Engineering | 9.0 |
| Support services | 8.1 |
| Financials | 4.2 |
| Speciality Chemicals | 2.1 |
| Retailers | 1.7 |
| Cash | 2.4 |
Source: Evenlode
Jason Hollands, managing director at Tilney Group, does not think soft closing Evenlode Income poses any risks to its investors, and says the fund's current size is unwieldy. "Historically the fund hasn't had a huge weighting to smaller companies, but it did have more small-cap exposure in its early days," he adds. "Although the lion's share of its assets is now in large, liquid companies, its managers want to maintain the [option of being able] to buy small-caps."
Mr Hollands plans to continue holding the fund in his own individual savings account (Isa).
However, if your investment platform does not offer TB Evenlode Income or you want an alternative, Mr Hollands says the recently launched TB Evenlode Global Income Fund (GB00BF1QNC48) is also a good way to access that asset manager's investment strategy. The global fund currently has around £65m in assets under management.
If you prefer to have a UK equity income fund, options include Standard Life Investments UK Equity Income Unconstrained (GB00B7G8Q193), managed by Thomas Moore, and Threadneedle UK Equity Income Fund (GB00B8169Q14), managed by Richard Colwell.
"Standard Life Investments UK Equity Income Unconstrained has a much greater bias to small and medium companies than Evenlode Income, but it's a high-performing fund," says Mr Hollands. "Threadneedle UK Equity Income, meanwhile, is a good core fund for UK equity income."
Platforms on which TB Evenlode Income is available
7IM
AJ Bell Youinvest
AllFunds
Alliance Trust Savings
Ascentric
Aviva
AXA Elevate
Bestinvest
Charles Stanley Direct
Chelsea Financial Services
Club Finance
Cofunds Retail
Commshare
FNZ Wealth
Frequent Trader
Fundsnet
Fund Store
FundsNetwork
Halifax Sharedealing
Hargreaves Lansdown
Interactive Investor
James Hay
Novia
Nucleus
Old Mutual Wealth
Pershing Nexus
Raymond James
Rplan
Standard Life
TD Direct Investing
The Share Centre
Transact
True Potential
Trustnet Direct
TQ Invest
Zurich
| Source: KL Communications |
TB Evenlode Income (GB00BD0B7D55)
| PRICE | 207.2p | MEAN RETURN | 10.44%** |
| IA SECTOR | UK All Companies | SHARPE RATIO | 1.06** |
| FUND TYPE | Open-ended investment company | STANDARD DEVIATION | 9.07%** |
| FUND SIZE | £2.075bn | ONGOING CHARGE | 0.9% |
| No OF HOLDINGS | 41* | YIELD | 2.6% |
| SET UP DATE | 19/10/2009 | MORE DETAILS | evenlodeinvestment.com |
| MANAGER START DATE | 19/10/2009 |
Source: Morningstar as at 13/03/18, *Evenlode Investment Management as at 28/02/18, **Morningstar: data is based upon a simulated/extended track record, using the track record of Evenlode Income (GB00B40Y5R17)
