Despite producing a respectable amount of income in the July 2017 study, Sanlam said the fund is one of the poorest income payers this time round with disappointing performance and high volatility as a result.
The fund has been placed bottom of Sanlam’s latest grey list – described as the group for managers with an out-of-favour style or an early signal for a fund in decline since – having occupied fourth position in the last study.
Sanlam’s Income Study, which has been running for 30 years, monitors the best and worst performing funds over a six-month period. It ranks funds based on absolute income generated over the past five calendar years; capital growth for each of the past five 12-month periods; and volatility over the past five years.
Elsewhere, the Threadneedle UK Equity Income fund, which is the highest ranking Threadneedle fund, fell 18 places from the white list – the group containing the top-rated UK equity income funds – to the grey list.
Likewise, the Unicorn UK Income fund also dropped into the grey. The fund has fluctuated from topping the white list in January 2016 to falling into the grey list in July 2016 and hitting the white list again in July 2017.
However, Sanlam also revealed the largest positive mover was the Santander Enhanced Income fund, which climbed 21 places from towards the bottom of the grey list in July 2017 to near the top.
The black list
Sanlam’s black list, which is for consistent underperformers, was populated by the same repeat offenders except for two new entrants, the Ardevora UK Income fund and UBS UK Equity Income fund.
These two funds dropped into the black from their positions in the grey due to disappointing performance over the period.
The white list
The white list contains funds that have established the ability over five years to produce superior total returns. The majority of funds in the list remained stable, with some of the lower ranking moving down in to the grey list.
Other than a slight shuffle in the top half, the top nine funds remain unchanged since the previous study.
The list did see three new entrants: RBS Equity Income, Man GLG UK Income and Lazard Multicap UK Income.
RBS Equity Income climbed 13 places, following its fall to the grey list in January 2017. Man GLG UK Income moved up 32 places in July’s study and has since risen another four places. In 2016 it found itself at the bottom of the black list.
Finally, Lazard Multicap UK Income has also crept into the white list, due to its lower volatility than many other funds.