JP Morgan Asset Management has changed the remit of its long-term underperforming Premier Equity Income fund and renamed it the UK Higher Income fund.
James Illsley, the manager of the £299m fund, now targets stocks that can pay a superior and sustainable dividend yield to that of the FTSE All Share Net Index.
According to FE Trustnet, the fund has returned 0.1% year to date over five years, compared to an average sector gain of 8.3% and a 12.2% rise in the FTSE All Share Index. (article continues below)
Although its long-term record remains weak, performance has picked up over the past year. Year to date, the fund returned 8.6%, which is in line with the sector average and an outperformance of the index, which has returned 4.1%.
JP Morgan says it is not possible to attribute the long-term underperformance of the fund to a specific stock or sector over such a lengthy time period. However, it says the fund had “some periods of very disappointing performance” in 2007 and 2009.
Following the changes to the fund, the UK equities team expects performance to further improve.
“Dividend yield is a well known value proxy which ensures a stream of income and overall return despite how markets may impact the capital of the fund,” JP Morgan says. “We are confident that the long-term and well documented benefits of value investing will not only deliver a compelling performance, but will serve as an ideal product for an equity investor looking to increase their stream.”
The JP Morgan Premier Equity Income was launched in November 1959 and recently renamed into UK Higher Income fund. Illisley has been managing the portfolio since March 2006.