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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) 



Forecasts are inherently limited and are not a reliable indicator of future results.

Source: Citi Income Report, 01.10.17. 

“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



General risks

The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth.

Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations.

Investment objectives and performance targets may not necessarily be achieved, losses may be made.


Specific risks

Geographic/Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that the resulting value may decrease whilst portfolios more broadly invested might grow. 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. Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. Concentrated portfolio: The portfolio invests in a relatively small number of individual holdings. This may mean wider fluctuations in value than more broadly invested portfolios.

Blake Hutchins

Portfolio Manager



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Important Information

All information is as at 30.09.2017 unless otherwise stated.

*Targets may not be achieved.