At the present moment in time open ended investment structures are under intense scrutiny, none more so than those in the UK Equity Income sector. The UK Equity Income universe has been in need of some TLC for a long time; it is the key to success and meeting client expectations. TLC is often overlooked but will become even more important in the Income Equity managers process; it is something that the Kames UK Equity Income Fund has at its core.
Tender Love and Care is given to children at an early age, they need reassurance when things go wrong and at times they can become irrational and distressed. TLC helps provide a coping mechanism. TLC is also required for UK Equity Income funds to deal with issues and avoid them in the first place, but this is dealt through Transparency, Liquidity and Control.
- Transparency is provided by investing in a single asset class through a simple structure and process, focussing on companies that pay and more importantly grow their dividend.
- Liquidity is looked at via position size and the ability to buy and sell the investment. This is not Dragons Den, with large positions in illiquid companies. All companies must pay a dividend and have solid balance sheets, so that they are giving cash to us and not the other way around.
- Control is provided through a disciplined process and strong risk management that an individual cannot choose to ignore.
TLC has been given to the Kames UK Equity Income Fund since its launch in June 2009. We think its clear and consistent application has been key in delivering what we believe most income investors value: a premium income to the market, a dividend that has grown each year since launch, and achieved without sacrificing capital performance. Every parent wants their child to be well balanced. At times it can seem like a thankless effort but the long-term reward is worth it.
Kames UK Equity Income Fund is only available for sale in the UK.
Opinions and views from the Equities team at Kames Capital are not an investment recommendation, research or advice and should not be considered as such. Content discussing investment strategies and stocks is derived from and solely relates to the investment management activities of Kames Capital.
About the author
Douglas Scott is an investment manager in the UK Equities team with responsibility for managing several equity income funds. In addition, Douglas has analysis duties for the tobacco, real estate, telecoms, beverages and oil services sectors. He joined us in 2003 from Investec where he was a stockbroker specialising in the telecoms sector and, prior to that, worked for TRW and Abbey National in their UK equity teams. Douglas has a 1st Class Honours degree in Aeronautical Engineering from the University of Glasgow and a Diploma in Actuarial Science from Heriot-Watt University. He has 23 years’ industry experience*. *As at 30 April 2019.
About the author
Iain Wells is an investment manager in the UK Equities team with responsibility for managing several equity income funds. In addition, Iain has analysis duties for the insurance, general retail, engineering, utilities and paper & packaging sectors. He joined us in 1996 from Edinburgh Fund Managers where he was an investment manager and, prior to that, worked for Dunedin Fund Managers on the Asian equities desk. Iain studied Business Studies and Accounting at the University of Edinburgh and has an MBA. He has over 30 years’ industry experience*. *As at 30 April 2019.