Man GLG UK Income aims to achieve a level of income above the FTSE All-Share index together with some capital growth. It does this by investing primarily in UK equities or equities of companies that derive a substantial part of their revenues from activities in the UK.

Manager Henry Dixon focuses on dividend growth as opposed to the absolute level of yield, and runs a multi-cap portfolio with a distinct bias towards smaller UK dividend-payers. As the fund does not own many of the typical names owned by larger dividend-focused funds, it could experience greater volatility of returns than competitors. This fund may be suitable to complement a core portfolio.

Dixon takes a value-based investment approach and has managed to produce exceptional returns in excess of the benchmark over the short and medium-term despite the style being out of favour. The fund is relatively concentrated with 65 holdings. The manager also has the ability to invest in the bonds of companies where the team’s analysis of the capital structure suggests more attractive capital upside and income potential than in its equities.

Currently its yield is over 6%, and dividends are paid quarterly.

Please note: As a result of recent extreme economic conditions, many companies have temporarily stopped paying dividends or have significantly reduced the amount they are paying out. This means the income that is likely to be achieved by funds and trusts in the near future may be far less than the historic yield quoted in the portfolios.

September 2020