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Tailored for investment professionals this site provides information on our products, strategies and services. Please remember capital is at risk and past performance is not a guide to the future.

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Investec UK Equity Income Fund

Seeking to provide an attractive and growing level of income

Fund highlights

  • Conviction driven UK equity income portfolio focused on sustainable dividend growth, not dividend yield. 
  • Total return approach that combines income and capital growth. 
  • Seeking steadily increasing annual income distributions, yield > yield on the FTSE All Share, and 3-5% p.a. outperformance above the FTSE All Share Index*. 
  • Focus on cash generative, attractively valued, quality businesses with low capital intensity.

 

 

Focus on dividend growth, not dividend yield

The Fund is focused on companies with sustainable dividend growth, rather than those with a high initial yield. We believe that companies with low capital intensity are in a better position to cover their dividends through cashflow.

Free cashflow cover of dividend (2018E) 



Source: Citi Income Report, 01.10.17. Forecasts are inherently limited and are not a reliable indicator of future results.

“Sustainable dividend growth, supported by cashflow”

Blake Hutchins, Portfolio Manager - UK Equity Income Fund
 

What makes us different?

We believe that:

  • Dividends, and the compounding effect of reinvesting dividends, are a key component of real equity total returns. 
  • Sustainable dividend growth, supported by cashflow, is more important than dividend yield. 
  • Companies with sustainably high or improving returns on capital, strong free cashflow support, and low capital intensity, are those most likely to grow their dividends and deliver attractive real total returns.


Research framework

A Company Valuation Framework is at the core of the investment team’s research process. Success is based on the strength of three key factors — business model, financial model, and capital allocation — ultimately, however, valuation is key.

Source: Investec Asset Management.


Learn more about Quality companies for growth and Income

Blake Hutchins

Portfolio Manager



Watch the Masterclass

Important Information

*Targets may not be achieved

The yield reflects the amount that may be distributed over the next 12 months as a percentage of the Fund’s net asset value per share, as at the date shown, based on a snapshot of the portfolio on that day. The yield number in brackets, it is calculated in the same way, however, as the charges of the share class are deducted from capital rather than income, it shows the level of yield had these charges been deducted from income. Yields do not include any preliminary charge and investors may be subject to tax on their distributions. The effect of taking expenses from capital is to increase income whilst reducing capital to an equivalent extent and may constrain future capital and income growth.

All information is as at 30.09.2017 unless otherwise stated.

The Fund’s investment objectives and performance targets will not necessarily be achieved and there is no guarantee that these investments will make profits; losses may be made. Past performance is not a reliable indicator of future results.

Fund specific risks:
Geographic / Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean the value of the Fund may decrease whilst more broadly invested funds might grow.

Derivatives: The use of derivatives is not intended to increase the overall level of risk in the Fund. However, the use of derivatives may still lead to large changes in the value of the Fund and includes the potential for large financial loss.

Charges from capital: For Inc-2 shares classes, expenses are charged to the capital account rather than to income. This has the effect of increasing income (which may be taxable) whilst reducing capital to an equivalent extent. This could constrain future capital and income growth.

Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. bankruptcy), the owners of their equity rank last in terms of any financial payment from that company.

Concentrated portfolio: The Fund invests in a relatively small number of individual holdings. This may mean the value of the Fund may fluctuate more widely than more broadly invested funds.