Focusing on major themes rather than individual stockpicking is the best way to identify long-term investment value, say Stephen Bailey and Jan Luthman of the CF Walker Crips Equity Income Fund. Themes are “relatively slow-moving”, says Luthman in Investment Week. This and their “delayed incorporation into equity market valuations” gives a manager longer to evaluate opportunities and position the portfolio to benefit from them.
For example, the fund has started building up its exposure to the telecoms sector, in particular non-voice data. There’s been terrific growth in data traffic, says Luthman, but what has taken the sector by surprise is the growth in uploading. “People are uploading increasing amounts of data, and this is creating bottlenecks within systems and capacity constraints.” So the managers have added Cisco Systems and Vodafone to the fund in order to benefit from this trend.
Fund returns have been strong: it’s in the top quartile of the IMA UK Equity Income & Growth sector on a one-, three- and five-year view, having returned 42.5%, 2.6% and 46.3% respectively. Analyst Meera Patel of Hargreaves Lansdown thinks it’s likely to continue doing well, “given its overweight exposure to areas like telecoms and pharmaceuticals, which are expected to perform well against a challenging backdrop”.
The total expense ratio is a slightly above-average 1.78%. It also charges an entry fee of 5%, which can be avoided by investing through a funds supermarket, such as Hargreaves Lansdown.
Contact: 020-3100 8000.
CF Walker Crips Equity Income Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| GlaxoSmithKline | 5.01 |
| Vodafone Group | 5.00 |
| Royal Dutch Shell | 4.91 |
| AstraZeneca | 4.89 |
| Unilever | 4.86 |
| BP | 4.82 |
| Prudential | 4.80 |
| British American Tobacco | 4.27 |
| Aviva | 4.09 |
| Pearson | 3.93 |