VT Tyndall Unconstrained UK Income
Previously VT Tyndall Real Income
VT Tyndall Unconstrained UK Income is a high conviction, highly differentiated mid-cap focused UK income fund. Simon Murphy is a very experienced manager and this fund offers something different with its combination of premium yield and dividend growth stocks.
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Fund Manager
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Fund Manager
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Simon has managed this fund since February 2020 when he joined Tyndall. He qualified as a Chartered Accountant with PwC in 1997 before joining M&G Investments on the UK equity desk. He spent nearly 10 years at M&G before moving to Merian Global Investors (formerly Old Mutual Global Investors) where he spent nearly 11 years heading up the UK Large Cap equities team.
Simon has managed this fund since February 2020 when he joined Tyndall. He qualified as a Chartered Accountant with PwC in 1997 before joining M&G Investments on the UK equity desk. He spent nearly 10 years at M&G before moving to Merian Global Investors (formerly Old Mutual Global Investors) where he spent nearly 11 years heading up the UK Large Cap equities team.
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Company Description
Tyndall is a small boutique investment firm which is independently managed and owned. The company runs a number of unconstrained strategies which are managed by experienced managers, who have all joined from larger firms. It has three main strategies; UK Equity Income, Global Equities and North American Equities. There is a heavy emphasis on high conviction active management, designed to offer a real alternative to ‘traditional funds’. The company has around £1.7bn in assets under management.
Fund Performance
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Talking Factsheet
Investment process
Simon believes that most UK equity income funds are dangerously concentrated in just a few stocks and sectors. There is also very little differentiation between many of the big UK equity income funds. Simon believes that much better returns and diversity of income can be achieved by investing further down the market cap spectrum. As such the fund has a heavy mid-cap bias.
The VT Tyndall Unconstrained UK Income fund has no benchmark constraints and will look very different to the index. It highlights research which shows that funds with a higher active share typically deliver better returns and outcomes for clients over time. A big part of the funds philosophy is to have the freedom to be unconstrained and invest anywhere. For this reason, the fund has no structural bias to any particular investing style or sectors.
This is a stock picking fund. Stocks are divided into two categories. Premium yield and dividend growth. Dividend growth stocks will have structural growth and rising dividends, while premium yield stocks typically have solid cash cover and low gearing. As the name suggests, premium yield stocks must have a yield which is at a decent premium to the wider market.
Simon avoids stocks with high operational and financial gearing. One or the other may be acceptable but the combination together can get you into trouble. Simon’s stock picking is focused on forecasting dividends and ensuring the sustainability of the dividend well into the future.
The portfolio is highly concentrated at just 30-35 names, with no structural style bias within the process.
Risk
Due to its active approach, returns are likely to differ markedly from other UK equity income funds. With greater exposure to mid-cap names we’d also expect more volatility from the fund versus its peers and the index. All risks are monitored in the portfolio, with risk consideration beginning at the stock level with rigorous company research.
ESG
ESG - Limited
The fund’s major ESG focus is around governance and the quality of company management. Simon strongly believes that the right management team is critical to a good investment but also that good managers are likely to manage ESG risk far better. Simon will always meet the managers of any company prior to any investment. Meeting management regularly is an important part of the fund’s process. As part of its unconstrained philosophy the fund has no permanent exclusions or restrictions.
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