The Martin Currie UK Equity Income fund has undergone a radical change following the arrival of Scot...
The Martin Currie UK Equity Income fund has undergone a radical change following the arrival of Scott McKenzie as manager in October last year.
He has reduced the holdings from 57 to 48, selling 24 names out of the portfolio and adding 15 further positions. McKenzie, previously at Britannic and Morley, has built up small-cap exposure from 0% to 8%, with 68% in blue chips, 23% in mid-caps and 1% in cash.
McKenzie has divided the portfolio into two pools. The first is looking for stocks with superior dividend growth prospects to the market as a whole, hence his focus on small caps. When he previously ran the Norwich UK Equity Income fund, his small-cap exposure could be as high as 20%. McKenzie has also added in some positions where he is taking a contrarian stance, for instance BP and Royal Bank of Scotland, where he believes the market is undervaluing them.
The portfolio's dividend yield has also been increased from 110% to 120% of the All Share and to achieve this target he has built up a second pool of assets, some 35% of the portfolio, invested in shares yielding more than gilts.
McKenzie is looking to blend the two strategies to provide investors with both income and growth. He added: "At the moment, dividend growth is important because the fund has an objective to grow income to shareholders and I also need growth to offset inflation, which is currently going up in the UK."
He rarely sets targets or timeframes, prefering to run winning positions regardless of how quickly they reach a price.
Slow progress in improving diversity
Three examples of compensation rule issues
Buying in baskets
Scam victims lost average £91,000
Stepped down following MBO