Investment funds looking for value in larger UK companies Go compare with our comparison table

Investment funds looking for value in larger UK companies

13 October 2010 / by Paul Dicken

UK growth fund managers are increasingly seeking value from ‘large and mega-caps’, according to research and ratings agency Standard and Poor’s.

Despite a lack of strong consensus a number of growth investment managers are seeing fewer opportunities in medium sized businesses against the backdrop of economic volatility and pressures on pricing.

In a review of 44 funds, the majority rated by Standard and Poor’s, analyst Daniel Vaughan said an issue for many fund managers over the summer had also been what to do about BP, in the light of the changes in the company’s share price prompted by the oil spill in the Gulf of Mexico.

Vaughan identified several fund managers that were moving towards equities in large companies with some commentators suggesting mid-cap companies could see falls in value.

“A bull run since the late 1990s [on the FTSE 250 index], together with the strong rally from the March 2009 lows led by cyclical companies, has left some market commentators talking about a potential mid-cap bloodbath in 2010,” he said.

However, Vaughan found no consensus on this amongst rated managers, with some highly rated managers having higher than ever exposure to firms classed as mid-cap.

“Central to the argument is the issue of gaining exposure to overseas sales and structural earnings growth,” he added.

Amongst those seeking value in larger companies were Ben Whitmore at the Jupiter UK Special Situations Fund, Mark Lyttleton who manages the BlackRock UK Fund and James Griffin who runs Fidelity’s MoneyBuilder Growth Fund.

Tom Dobell at the M&G Recovery Fund was still finding opportunities in the mid-cap area and AIM listings, with Karen Robertson at Standard Life investing 30 per cent of the UK Equity Growth Fund portfolio in mid-cap firms.

© Fair Investment Company Ltd

 Product NameISA OptionIncome YieldMore Info
Henderson Strategic Bondyes5.7%More Info >
Income Paid Quarterly. Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. See latest fund factsheet for details.
Newton Asian Incomeyes5.43%More Info >
Income Paid Quarterly.The objective of the Sub-Fund is to achieve income together with long-term capital growth predominantly through investments in securities in Asia Pacific ex Japan (including Australia & New Zealand) region. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Newton Higher Incomeyes5.4%More Info >
Income Paid Quarterly. The objective of the Fund is to achieve increasing distributions on a calendar year basis with long term capital growth. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Distributionyes4.7%More Info >
Income Paid Monthly. Invesco Perpetual Distribution offers a balance between both income and capital growth through investment in UK based equities and fixed interest securities. See latest fund factsheet for details.
Invesco Perpetual Monthly Income Plusyes4.46%More Info >
Income Paid Monthly. Popular income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. See latest fund factsheet for details.
Woodford Equity Income Fundyes3.50%More Info >
Our selected partner for investing in Neil Woodford's Equity Income fund is Barclays Stockbrokers, via their INVESTMENT ISA for new ISAs and ISA transfers, or their MARKETMASTER® ACCOUNT for non-ISA investments. Income Paid Quarterly.The fund’s investment objective is to provide investors with long-term appreciation through investing in stocks primarily listed on the UK stock exchanges. Up to 20% may be invested in international companies. The income objective is 10% higher than the FTSE All Share Index yield with an anticipated annual yield of 4.0%.
Newton Global Higher Income yes4.7%More Info >
Income Paid Quarterly. The objective of the Sub-Fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Jupiter Merlin Income Portfolioyes3.10%More Info >
Income Paid Quarterly. To achieve a high and rising income with some potential for capital growth by investing predominantly in unit trusts, OEICs, Exchange Traded Funds and other collective investment schemes across several management groups. The underlying funds invest in equities, fixed interest stocks, commodities and property, principally in the UK. See latest fund factsheet for details.
M&G Global Dividendyes3.27%More Info >
Income Paid Quarterly. The Fund aims to deliver a dividend yield above the market average, by investing mainly in a range of global equities. The Fund aims to grow distributions over the long-term whilst also maximising total return (the combination of income and growth of capital). See latest fund factsheet for details.
Kames Strategic Bond yes2.95%More Info >
The primary investment objective is to maximise total return (income plus capital ) by investing in global debt instruments,denominated in any currency, ranging from AAA Government Bonds through to high yield and emerging market corporate bonds. At least 50% of the fund will be invested in sterling and other currency denominated bonds hedged back to sterling. See latest fund factsheet for details.
M&G Optimal Incomeyes2.44%More Info >
Income Paid Twice Yearly.The fund aims to provide a total return to investors based on exposure to optimal income streams in investment markets. The fund invests across a broad range of fixed income assets according to where the fund manager identifies value. See latest fund factsheet for details.
*Current Income Yields are Gross, Variable and Not Guaranteed
**Historic Yield reflects distributions declared over the past 12 months as a percentage of the mid-market price of the fund.
*** This is the target yield the fund aims to achieve per year, it is not guaranteed and could change according to prevailing market conditions. The target yield is net of basic rate tax.
Information correct as at 08/02/2012.

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