Changes see £2.1bn Newton Higher Income given sell rating

Rich Wilmot - Newton
Richard Wilmot

Sanlam Private Investments has put a ‘sell’ rating on the £2.1bn Newton Higher Income fund, following its change of manager and investment process.

In December 2012, Newton announced that Richard Wilmot, investment leader for UK equities at Newton and manager of the £1.1bn Newton UK Equity fund, would replace Tineke Frikkee as lead manager on the portfolio. Frikkee later left Newton.

Furthermore, Newton Higher Income’s buy and sell discipline was widened and measures were implemented to steadily reduced its yield to allow the dividend to grow from the new, lower yield and provide an attractive total return to investors.

SPI head of managed funds Paul Surguy notes that the fund remains on his firm’s Grey List, which is home to funds with an out-of-favour style or showing early warning signals of being in decline, but reveals it has been given a sell rating.

“Whilst the historical level of income has supported the fund this time, we expect that to fall away as the new manager adapts the fund towards its more flexible remit,” Surguy says.

“This disappoints us, with many investors having purchased the fund for a higher level of income, they should now look elsewhere.”