26 | SHARES | 24 May 2018
ROYAL LONDON UK EQUITY INCOME
(GB00B8Y4ZB91) BUYFigures from Seven Investment Management
show that so far in the 21st Century the FTSE 100
has delivered a return of 12% without dividends but
once dividends are reinvested this return is almost
10 times as large at 114%.
For long-term investors it therefore makes
sense to have an income-focused fund in your
portfolio and to buy the ‘acc’ version which rolls up
dividend payments so you own more fund units.
Royal London UK Equity Income, which trades
on an historic yield of 3.9%, has been managed
by Martin Cholwill since 2005. It is a top quartile
performer on a three and five-year view. Cholwill
focuses on companies with robust balance sheets
which are sufficiently out of favour to enable them
to be bought at a higher yield than that offered by
the wider market.BAILLIE GIFFORD JAPANESE
(GB0006011133) BUY
There may have been a recent pause for breath
in Japan’s strong growth run but Japanese
companies are becoming more shareholder-
friendly and this bodes well for the long-term
returns for those funds which invest in this market.
Managed by a strong team, Baillie Gifford
Japanese invests in a focused portfolio of
between 45 and 65 names and adopts a patient,
low turnover approach.
Included are a diverse collection of names
which typically stray a long way from the
benchmark. This fund has consistently delivered
top quartile performance. More prominent names
in the portfolio include tech firm Softbank and car
maker Toyota.TWO FUND IDEAS
Royal Dutch Shell is Royal London UK Equity Income’s top holdingdŽLJŽƚĂŝƐŽŶĞŽĨƚŚĞŵŽƌĞƉƌŽŵŝŶĞŶƚŶĂŵĞƐŝŶƚŚĞƉŽƌƞŽůŝŽ