Liontrust’s Income Fund has regained its place at the top of an equity income fund study produced by South African financial services firm Sanlam after it had slipped 18 places by the end of 2019.
Sanlam said the fund’s ranking is due to its success across the study’s criteria, namely volatility, income and performance.
In second place, a spot it enjoyed last year as well, is the Santander Enhanced Income Fund. Managed by Graham Ashby and Duncan Green, Sanlam said the fund paid a good dividend compared to its peers.
Two new entrants to the White List are the BlackRock UK Income Fund and the ES R&M UK Equity Income Fund, having jumped 33 and 24 places respectively. Sanlam said first quartile volatility outcomes over five years versus peers and good performance during the volatility of 2020 have helped to secure White List placings for both funds.
The aforementioned funds are on Sanlam’s White List, a group of the best performing funds. Six out of the first eight funds are new entrants and this is true of the LF Miton UK Multi Cap Income Fund, managed by Gervais Williams. Sanlam said a key attribute which aided the fund’s 17 place jump is its strong volatility management.
The Black List is where asset managers don’t want to be although Sanlam said constituents of it remain relatively consistent. Familiar names include Liontrust Macro Equity Income, HSBC Income, ASI UK High Income Equity, M&G Dividend, Janus Henderson UK Equity Income and Growth and ASI UK Income Unconstrained are all there.
Philip Smeaton (pictured), Chief Investment Officer at Sanlam Private Wealth, said in a statement: “Long-term dividend growth has certainly benefitted income investors over the last decade, but the big question is whether these payments are sustainable.
“Most of the UK’s largest companies pay dividends, although a disproportionate volume are from just a handful of major industries. Pressure on cash flows has forced companies to slash payouts, in some cases for the first time ever. In many instances these have been accompanied by share price collapses, which have only added to the pain.”
