The Investment Management Association (IMA) has revealed the final list of funds in its new UK Equity Income and Growth sector.
It has stripped out those funds from the UK Equity Income sector that failed to hit its target of 110% of the FTSE All-Share yield. Most of them chose to transfer to the new sector and keep their track records. One exception is Baring Equity Income Trust, which has moved to the Unclassified sector.
The 17 funds that have moved into the new sector include four Invesco Perpetual funds, among which are Neil Woodford’s Income and High Income vehicles, Fidelity Multi-Manager Equity Portfolio, Credit Suisse Multi-Manager Income Portfolio, and Neptune Income.
Funds in other peer groups were given the opportunity to move if they achieve 90% of the yield of the FTSE All-Share and generate both income and growth. Two funds so far have chosen to do so – Rathbone Income and Growth and Henderson UK Growth & Income.
Legg Mason UK Income is one fund that has moved across from UK Equity Income. Andy McNulty, the firm’s head of sales, says the fund chose to move sector rather than buy into higher-risk assets to boost yield. “We would rather opt for a sensible yield for our clients than expose them to riskier, higher-yielding companies,” he says.
Earlier this year Invesco Perpetual said it would transfer its funds rather than sacrifice a long-term balance between income and capital to achieve short-term yield.