UK Equity Income fund focused on finding asset-light companies with cash generative economics and long-term growth potential, that also offer an attractive initial yield and a growing dividend stream. These types of companies tend to be better insulated during the market downturns. It will always be at least 80% invested in the shares of high-quality UK-based companies, but with revenues generated from a well-diversified range of geographies. With the valuations of many UK listed companies at attractive levels the opportunity set is as broad today as it was at launch in 2009.
"I like all the companies we own to contribute to returns and for the power of economic compounding to do the heavy lifting of generating dividend growth and capital appreciation."
Hugh YarrowPortfolio Manager
Aims to deliver capital growth and a rising income stream from a portfolio of UK equities
Focus on companies with high returns on capital, a strong economic moat and pricing power
Disciplined long-term approach, supported by a collaborative investment team shared across all the Evenlode strategies
Hugh has been a manager of Evenlode Income since launch in October 2009. Previously he managed several equity income funds at Rathbone UTM.
IMC
15 years
22 years
Ben has worked on Evenlode Income since launch in 2009, and has been a manager of the Evenlode Global Income Funds since launch in 2017.
CFA (Level 1), IMC
15 years
16 years
Chris joined Evenlode Investment Management in February 2018 having previously been an equity research analyst at Investec Bank and Berenberg.
Qualified Chartered Accountant and Chartered Financial Analyst
6 years
21 years
In a quiet month for company news flow, investors were more focused on electoral than corporate developments. The rising expectation of another Trump presidency, and a shift towards populism in the French parliamentary elections, were both reflected in the performance of a range of financial assets. In the US, data continues to suggest that inflation is moderating, but political considerations – such as potential tariff increases under Trump - meant inflation expectations and US government bond yields rose back up again. Meanwhile, the French stock market[1] fell more than -6%. In contrast, with the outcome of our domestic election more predictable, the UK stock market had a quieter month.
Evenlode Income rose +0.2% in June compared to a fall of -1.2% for both the FTSE All-Share and the IA UK All Companies sector. The most positive contributors to the fund’s return were RELX and Halma. Halma released strong full year results with double digit growth in revenue and profit. RELX’s share price increased on no specific news. The most negative contributors to fund return were GSK and Spectris. GSK’s share price fell following an adverse court ruling in the ongoing Zantac litigation. The company plans to appeal and has a strong case backed by medical evidence. Spectris issued a trading update highlighting weaker sales into the pharmaceuticals and electric vehicle markets.
The main change to the portfolio was the building of a small holding in CME Group. CME is a US listed futures exchange and clearing house, with leading positions in interest rates, commodities, currencies and equity indices. The continued expansion of global capital and commodity markets supports strong growth prospects for the business. This was financed by reductions in the position size of several other overseas holdings (PepsiCo, P&G, Microsoft and Wolters Kluwer). Elsewhere we trimmed back the fund’s large position in RELX and recycled the capital into a broad range of holdings where we are seeing a compelling combination of quality and valuation appeal.
In March and April, the share prices of many of the portfolio’s cash compounding companies significantly lagged the UK market, as other areas such as financial and commodity stocks drove the index higher. The aggregate portfolio, though, continues to make healthy fundamental progress – in-line with expectations at the start of the year - and valuations also remain unusually good relative to history. The current free cash flow yield for the portfolio is 5.0% and forecast to grow to 5.7% next year.
[1] CAC 40 Index
1Unilever | 7.8 |
2Diageo | 6.9 |
3RELX | 6.7 |
4Reckitt | 5.4 |
5Bunzl | 4.7 |
6Experian | 4.5 |
7Smiths Group | 3.6 |
8London Stock Exchange Group | 3.3 |
9Intertek Group | 3.2 |
10Smith & Nephew | 3.1 |
11Howden Joinery Group | 2.9 |
12Compass | 2.8 |
13Games Workshop | 2.7 |
14GSK | 2.7 |
15Roche | 2.6 |
16Spectris | 2.4 |
17Informa | 2.4 |
18Savills | 2.3 |
19SGS | 2.2 |
20Hargreaves Lansdown | 2.2 |
Industrials | 36.7 | |
Consumer Staples | 22.1 | |
Financials | 10.9 | |
Health Care | 8.3 | |
Consumer Discretionary | 7.6 | |
Information Technology | 7.6 | |
Communication Services | 2.4 | |
Real Estate | 2.3 | |
Materials | 1.1 | |
Cash | 0.9 |
United Kingdom | 87.8 | |
Europe | 7.1 | |
North America | 4.2 | |
Cash | 0.9 |
Comparator Benchmark | FTSE All-Share |
IA Sector | IA UK All Companies |
Morningstar category | EAA Fund UK Equity Income |
Launch date | 19 October 2009 |
Fund type | UK Domiciled OEIC |
Base currency | GBP |
Dividend frequency | Quarterly |
Active share | 76.7% |
Country of registration | UK |
The investment objective of IFSL Evenlode Income is to provide income and capital growth over Rolling Periods of 5 years, with an emphasis on income.
Dealing line | 0808 1789321 (UK) / +44 1204 803932 (overseas) |
Administrator email | Contact |
Dealing frequency | Daily |
Price frequency | Daily |
Settlement terms | T+3 |
Dealing cut-off time | 12 noon (UK Time) |
Valuation point | 12 noon, Daily |
Regular savings | Yes |
ISA eligible | Yes |
SIPP eligible | Yes |
EMX dealing codes | IFSL |
Calastone dealing | Yes |
Client services line | 0808 1789321 (UK) / +44 1204 803932 (overseas) |
Client services email | Contact |
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