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 Craig Rippe, Head of Multi-Asset.

Craig joined Canada Life Investments in March 2004. He became Head of UK Equities in March 2010 and was most recently appointed Head of Multi-Asset in May 2018. 

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. Therefore, although the Fund does maintain exposure to some income stalwarts, such as large-cap healthcare and tobacco, we believe dividend diversification is key.

The portfolio holds between 40 and 60 companies and the manager is under no obligation to invest in a company where he does 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 process has been in place since Craig Rippe began managing the Fund in 2004. This investment approach is based primarily on bottom-up stock selection. However, it is flexible and also 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 manager to form a view that will then drive investment choices at 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; financials, growth, cyclicals, defensives and resources. The relative weights vary dependent on where we believe we are in the macroeconomic cycle and enables 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 itself then 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 manager 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

MANAGEMENT EXPERTISE

Craig has worked at Canada Life Investments since 2004 and is supported by a highly experienced UK and global equity team

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 0.84% 0.75% £100,000 £100
B Acc GB00B4QFHX84 B4QFHX8 1.09% 1.00% £500 £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 6490

Email Icon contactclinvestments@canadalife.co.uk

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