Marlborough Multi-Cap Income Fund research update
Heather Ferguson | Thu 09 July 2015
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Unlike traditional equity income funds which focus on larger 'blue-chip' companies, the Marlborough Multi-Cap Income Fund is concentrated on higher-risk small and medium-sized firms. When selecting companies for investment, the manager seeks those exhibiting the potential to grow their dividend. An important indicator is the number of times a company could pay its dividend (also known as dividend cover) based on the level of cash it generates. The fund does however take its charges from capital which can increase the yield but reduces the potential for capital growth.
Investing in smaller companies can be higher risk as their prospects are often more sensitive to economic conditions. Indeed, in the run up to the UK general election, the share prices of many smaller companies fell for no good reason, in the manager's view, and he took this as an opportunity to top-up or purchase stocks at reduced prices.
Siddarth Chand Lall views the result of the UK general election as positive for UK businesses. The Conservatives are generally considered pro-business and UK stock markets reacted positively to the result; many of the stocks the manager topped-up prior to the election, including esure, Card Factory and DX Group, rose 10-15% in the month following the result. However, there are no guarantees this performance will continue.
Since launch, the fund has risen 88.7%* compared with 43.1% for the IA UK Equity Income sector. £10,000 invested at launch would now be worth £18,865 with dividends reinvested or £16,154 if the income of £1,980 was taken, although past performance is not a guide to future returns. The fund currently yields 4.13% (variable and not guaranteed).
| Annual percentage growth | |||||
|---|---|---|---|---|---|
| July 11 -
July 12 |
July 12 -
July13 |
July 13 -
July 14 |
July 14 -
July 15 |
||
| Marlborough Multi-Cap Income Fund | 2.25% | 30.00% | 25.04% | 13.49% | |
| IA UK Equity Income | -1.95% | 20.34% | 13.70% | 6.69% | |
Past performance is not a guide to future returns.
Full year performance data before 2011 is unavailable. Source Lipper IM* to 01/07/2015
Our view on this fund
Siddarth Chand Lall recently took over as lead manager of the Marlborough Multi-Cap Income Fund having co-managed the fund alongside Giles Hargreave since its launch in July 2011. While Giles Hargreave is still actively involved with the UK Smaller Companies Team he no longer has direct responsibility for the fund. We do not expect this to result in any significant changes to the portfolio as Siddarth Chand Lall has had substantial involvement with the fund since its launch and will continue to benefit from the support of Giles Hargreave and the highly experienced UK Smaller Companies Team. The fund retains its place on the Wealth 150+ list of our favourite funds with low ongoing fund charges. A charge of 0.45% p.a. also applies to hold investments in the Vantage Service.
Find out more about this fund including how to invest
Please read the key features/key investor information document in addition to the information above.