LF Canlife
UK Equity
Income Fund

The LF Canlife UK Equity Income Fund aims to generate an above-average income and long-term capital growth by mainly investing in the shares of UK companies.

fund manager

Our equities team comprises a number of experienced investment professionals, responsible for managing more than £2 billion in assets across global and regional mandates. UK equities form a significant share of this total, with the team managing both growth and income products. The LF Canlife UK Equity Income Fund is managed by Stuart Taylor, Senior Fund Manager and Rino Shala, Fund Manager.

 

fund strategy

The LF Canlife UK Equity Income Fund adopts an ‘unusual dividend approach’ to equity income, seeking to provide investors with a sustainable, diversified and uncorrelated income stream compared to peers. Although the Fund maintains exposure to some income stalwarts, such as large-cap healthcare and consumer goods, we believe dividend diversification is key.

The portfolio holds between 40 and 60 companies and the managers are under no obligation to invest in a name where they do not have conviction. The strategy and structure of the Fund is highlighted below.

Strategy

  • Portfolio constructed via fundamental stock selection, with a macro overlay
  • A conviction-led, long-term investment approach
  • An awareness of the benefits of capital growth means from time to time some positions may offer limited dividends

Structure

  • Target number of positions: 40-60
  • Target active position size: up to 5%
  • Typical cash weighting: 0-10%
  • Can zero weight sectors or stocks where no conviction

how the fund is managed

The LF Canlife UK Equity Income Fund benefits from a well-defined process when it comes to identifying investment opportunities and selecting individual holdings. This investment approach is based primarily on bottom-up stock selection. However, it is flexible as well as mindful of prevailing macroeconomic and market trends, such as:

  • Where we are in the economic cycle
  • Long-term equity market valuations
  • The inflation outlook

We believe that understanding each of these factors allows the management team to form a view that will drive investment choices at both a sector and stock level.

Sector selection

One of the lenses through which we consider the LF Canlife UK Equity Income Fund is a five way split between financials, growth, cyclicals, defensives and resources. The relative weights vary depending on where we believe we are in the macroeconomic cycle and enable us to better position the portfolio to take advantage of the underlying environment. In addition, we believe this approach to portfolio construction allows us to deliver a diversified source of return from both an income and capital perspective.

Stock selection

Our investment universe is comprised of liquid large and mid-cap UK equities, with a market-cap of greater than £500 million. The stock selection process takes into account several factors, such as a company’s market position, the quality of its brand and underlying assets, how it fits in with current market and economic trends, and the specific drivers behind earnings and dividend growth. The managers will also conduct a thorough analysis of a company’s valuation, being sure to understand its earnings forecasts and any changes to a company’s strategy or management team. Throughout this process we pay particular attention to what we call ‘unusual dividends’, giving our investors exposure to some interesting themes. This means we tend to have a higher exposure to mid-caps than many of our peers.

reasons to recommend

ATTRACTIVE INCOME

Due to the impact of compounding, history shows that reinvested dividends account for the bulk of equity market returns. The Fund aims to provide its investors with a sustainable, diversified and uncorrelated income stream by investing in ‘unusual dividend’ opportunities

LONG-TERM GROWTH

The Fund also aims to generate long-term capital growth, via a conviction-led, long-term approach to investing

FUND PERFORMANCE

Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Performance figures are on a bid to bid with net income reinvested basis. Valuations are based on the previous day's prices.

SHARE CLASS INFORMATION

Share
Class
ISIN SEDOL ONGOING
CHARGE
FIGURE(OCF)
ANNUAL
MANAGEMENT
CHARGE(AMC)
MINIMUM
INITAL
INVESTMENT*
MINIMUM
TOP UP*
C Acc GB00B6SC4F24 B6SC4F2 0.82% 0.75% £100,000 £100

Interested in this fund and would like to find out more?

Contact our team who will be happy to answer any questions you may have about this fund.

Tel Icon +44 (0)20 7415 6546

Email Icon contactclinvestments@canadalife.co.uk

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