Sanlam Private Investments has released its mid-year Income Study, an investor guide to UK equity income funds.
The study seeks to highlight those funds with a proven ability in producing a decent level of income and long-term capital growth, alongside carefully managed risks.
It also attempts to warn investors against holding funds that have generated consistently poor returns.
The White List is the select group of funds that have established over five years their ability to produce superior total returns, without taking excess risk.
The Black List is for consistent underperformers and, unless remedial action is being taken, a sign for investors to look elsewhere.
The Grey List can be a temporary home for a manager with an out of favour style or an early warning signal for a fund in decline.
Paul Surguy, head of managed funds, Sanlam Private Investments, says: “From 2015 retirees will have much greater freedom in how they choose to invest their hard-earned retirement savings. The headlines were dominated by naysayers who thought that those who had been prudent enough to save for their retirement would squander their life savings on a new Ferrari. We believe that those sensible enough to save for their retirement, are likely to calculate the cost of running, not just buying a sports car.
“Despite government debt having fallen in price, and equity investments continuing to reward investors with capital growth, equities continue to offer a higher income than gilts and cash. This continues to be supportive of equity income as a portion of investors’ portfolios, and, in the future, perhaps a greater part of their retirement pot.”
