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Royal London UK Equity Income

Elite Rated by FundCalibre

This core equity income fund invests in high yielding UK stocks, with a particular emphasis on companies generating significant free cashflow to fund sustainable dividend payments. Martin is a stock-picker with a focus on high conviction stock ideas and the risk profile of the fund reflects this.

Company Description

Royal London Asset Management, established in 1988, is a wholly owned and central part of the Royal London Group and one of the UK’s leading fund management companies, managing investment, pension fund and other assets on behalf of clients. In 2013, they acquired Co-Operative Banking Group’s Asset Management business. Based in the City of London, they invest across all major asset classes and were awarded the Elite Provider for Bonds Rating in 2015.

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Fund Manager

Martin Cholwill joined RLAM in March 2005 as fund manager for the Royal London UK Equity Income Fund. Before joining RLAM Martin spent 21 years working for AXA Investment Managers, where he managed a variety of UK equity portfolios concluding as a specialist UK equity income manager when he took over management of AXA’s UK Equity Income und in 1996. Martin has a degree in maths from Durham University.

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I am very much a disciple of the Warren Buffet doctrine that cash never lies.

Martin Cholwill - Fund Manager

The Investment Process

The approach taken in managing this core equity income fund is to identify good companies with strong business models and sound finances that are able to deliver sustainable dividend growth. Martin has a preference for companies with robust balance sheets yet whose shares are sufficiently out of favour so that they can be purchased on a dividend yield premium.

Risk

As a high conviction fund it does carry more risk than the UK Equity Income sector as a whole, being slightly more volatile relative to the stock index than its peers. It has, however, excelled on a risk-adjusted basis.

Our Opinion

Martin has a pragmatic approach, aiming to build a portfolio suitable for all market conditions, by prioritising the amount of free cash-flows of his stock selections. This means that his holdings are likely to offer increasing dividends, whilst avoiding overvalued stocks, and therefore generate a good total return for investors.

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