Henderson fund re-enters IA’s UK Equity Income group

Added 4th August 2017

The Henderson UK Equity Income and Growth fund has rejoined the Investment Association’s (IA) UK Equity Income category after nearly four years in the All Companies sector.

Henderson fund re-enters IA’s UK Equity Income group

The £430m fund dropped out of the UK Equity Income group on 1 September 2013 for not meeting the sector’s requirement of achieving a 110% average yield of the sector’s benchmark, the FTSE All Share, over a three-year rolling period.

But earlier this year, following an extensive consultation, the IA lowered the UK Equity Income sector's yield hurdle from 110% to 100% of the index yield.

As a result, the fund has qualified for what co-managers James Henderson and Laura Foll termed the “more relevant peer group”.

In a statement, the pair explained that had the fund remained in the UK Equity Income sector with its previous yield hurdle requirement, they would have been forced into holding high weightings in a small number of high income stocks.

“We chose, therefore, to move to the UK All Companies sector rather than change the investment process,” they added. “We were pleased with the decision earlier this year by the IA to lower the yield hurdle to 100% of the FTSE All-Share yield.”

Henderson and Foll said the decision would not alter the fund’s investment process or style.

“We will continue to seek out often unloved or under-researched companies that have the capability to grow sales and earnings, and therefore dividends, over time.

“The fund will continue to invest for income across the market cap spectrum, from smaller companies listed on the Alternative Investment Market through to larger companies within the FTSE 100.”

Janus Henderson said during the five years to 30 June, the fund delivered a total return of 92.1%, compared with 74.3% returned by the IA UK Equity Income sector and 75.3% by the IA UK All Companies sector.

Figures published by the IA today revealed UK Equity Income was among the worst three selling sectors in June after experiencing outflows of £428.3m during the month.  

 

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About Author

Sebastian joined Last Word Media in 2017 as editor of Portfolio Adviser. He previously spent 10 years as a journalist and editor in the UK institutional investment sector, most recently as editor of Portfolio Institutional. Prior to that, he held several roles at Professional Pensions which is part of Incisive Media.

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