Fund of the week: High-yield focus pays dividends
Nov 06, 2009
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Based in Dublin, the asset management firm Bloxham is off most investors' radar screens. But the Bloxham Global Equity Income fund, which aims to provide a rising income every year, is slowly making waves. Its strategy of picking high-yield shares has come at a price during this year's "dash for trash" – it's up 1.35% against a 18.8% return from the FTSE 100 year-to-date. But its dividend stream has risen by 5.5% between launch in April 2008 and April 2009, even as many firms faced pressure to slash theirs.
Managed by Prahmit Gose, one of Ireland's best-known fund managers, the fund looks for firms in Britain and the rest of the world that should grow their dividend streams for at least five years. That means that it isn't chasing the same FTSE 100 stocks as many UK equity income fund managers.
Gose likes stable companies with high cash cover on dividends and low debt/equity ratios. So his stocks have lagged riskier cyclicals in the current rally.
However, of the 50 stocks in the portfolio in April 2008, 40 have produced dividend growth, five were flat, and the other five disappointed over one year. Of those five, four were banks, which the fund has held on to mainly because they were so heavily sold off. Meanwhile, Bloxham has increased its US weighting from 23% to 31%. Current holdings include McDonald's, Merck and Intel.
All in all, this is an "impressive outfit", according to Hargreaves Lansdown, which has included the fund in its Wealth 150.The average p/e ratio of stocks in the portfolio is about 14, while the fund currently yields 4%. It has a total expense ratio of 1.84%.
Contact: 0870-606 6405.
Bloxham Global Equity Income fund top ten holdings
| Name of holding | % of assets |
|---|
| Allianz SE |
3.05 |
| Royal Dutch Shell B |
2.82 |
| AXA SA |
2.56 |
| Procter & Gamble Co |
2.54 |
| Unilever |
2.50 |
| Zurich Financial Services AG |
2.49 |
| Total SA |
2.45 |
| Deutsche Boerse AG |
2.42 |
| RSA Insurance Group |
2.38 |
| Schneider Electric SA |
2.38 |
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