Marlborough Fund Managers has appointed Greg Bennett as lead manager of its 30m UK Equity Income fund. Bennett, manager of UK Large Cap Growth, took over the portfolio from Michael Barnard on May 10.The move appears to be a response to recent underperformance. According to data from Marlborough, UK Equity Income returned 3.8% against 29.6% for the UK Equity Income sector in the 12 months to May 1. The portfolio was ranked last in the list of 77 funds. “We have looked at the causes for underperformance and are taking measures to avoid it happening in the future,” says Bennett. One of the most significant changes has been the increase in the large-cap focus of the fund, with 55% of stocks now common with the growth portfolio. “We are leveraging off the large-cap fund and looking to overlay one fund with the other,” says Bennett. “It is easy to get a high yield but you can get trapped and lose money. Investors are putting their money into the stockmarket and want capital growth as well. We are looking for high yield with an upside.” Bennett is targeting top-decile performance in terms of yield. About 30% of the portfolio is allocated to “stalwart” companies, with above-inflation dividends. The remaining 15% is held in special situations. “This could be in companies with special dividends coming up,” he says. Current sector overweights for the fund include industrials and utilities. Underweights are financials, healthcare and energy. “It is a totally unconstrained fund,” says Bennett. “We are benchmarked against the FTSE All-Share purely for performance measurement. Stocks are not weighted relative to the index.” Bennett arrived from Neptune Investment Management, where he ran the firm’s UK Equity and US Opportunities funds, in February. His large-cap Marlborough portfolio has taken almost 30m since its launch on March 6. The fund held 39 stocks on May 12. The fund focuses on FTSE 350 stocks, with 30 to 50 positions of up to 4%. The largest holdings were Rolls Royce, Smiths Group, International Power and Investec at May 2.