Ju ˚˛˝˙ˆˇ˘ ˆˇˆ ˚ PERSONALS FSICFBNT SS SYS SYSy.cu ...€¦ · Cheshire bS. Via website...

MOST people invest in the United States so that they can share in the success of the globe’s most iconic brands – the Apples, Facebooks and Microsofts of this world. But an increasing number of investors are also viewing the market across the pond as an alternative source of dividend income, a complement to the dividends they reap from UK companies. Income is not commonly associated with the United States but a number of its longstanding companies – the likes of Coca- Cola, Colgate-Palmolive, Johnson & Johnson and Procter & Gamble – have annual dividend growth records going back more than 50 years. It is a healthy dividend backdrop which has resulted in the setting up of a number of US trusts and funds with an income bent. Among them is JP Morgan US Equity Income, a £3.7 billion fund that has been managed by

Clare Hart from New York since launch nearly nine years ago. Under Hart’s command, the fund has enjoyed relative success, outperforming the S&P 500 Index over its lifetime – which is no mean achievement. Hart has stuck to her guns, employing a few basic rules to ensure the fund does not go off the proverbial rails. Conservatism is her watchword. She is no gungho investor. The fund is diversified, comprising more than 90 holdings spread across most – not all – of the market’s key sectors. Although nearly a third of the portfolio is in financial companies, the stocks in this sector are also sufficiently different not to keep Hart awake at night. She says: ‘As a manager, you are looking at how stocks will perform in different scenarios. What you do not want is all of them responding the same way to one piece of negative news. Yes, you

want to build a portfolio with upside potential but you have to look at the downside as well. That means constructing a diversified portfolio.’ Reinforcing this message, no stock is allowed to represent more than five per cent of the portfolio which means the biggest holding is Bank of America – at just 3.4 per cent. Hart calls it ‘risk mitigation’. In terms of income, Hart will not buy a company unless it has a dividend yield of at least two per cent. If the yield falls below this level she will not sell immediately although if it is indicative of a stock being overvalued she will take the profits and look for other opportunities. Her investment style is such that she tends to hold stocks rather than trade them in order to deliver returns. ‘I am looking for quality companies which have the ability to pay a stream of growing dividends. I do not fly in and out of companies.’ Although some experts

believe the US market is overvalued, Hart does not agree. ‘Yes, the US equity market is not cheap, but it is not the most expensive I have seen it either. Earnings growth can support the market at its current level,’ she says. Hart’s search for income-friendly companies means she holds some of the companies with longstanding records of dividend growth (Johnson & Johnson is a top ten holding). It also results in exposure to cash generative companies such as Apple and Microsoft and some businesses she describes as ‘unsung heroes’ – the likes of Texas Instruments and Analogue Devices. Hart is assisted by colleague Jonathan Simon, but she does all the trades within the fund.‘Jonathan would only step in if I got run over or abducted by aliens,’ she adds.

PERSONAL FINANCESTATS STATION

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dollarsdollarskorunykronerpoundseurosdollarsforintyenpesosdollarskronerzlotydollarsrandfrancsbahtnew liradirhamsdollars

1.5821.54428.238.5389.7591.13811.69317.5148.017.941.8828.7404.5031.84914.901.41443.742.8425.4531.517

Rates are for buying currency. They are for guidance only. The difference in the amount of travel money you can buy per £1 varies substantially by provider. Research has shown that travellers receive less for their money the closer they are to an airport.

n Richard Dyson

DESPITE recent falls, share prices have reached worryingly

high levels, says fund

group Invesco Perpetual’s Mark Barnett.

But he believes there are pockets of attractively priced firms where earnings and dividends have strong growth prospects, and these are the ones he wants to identify and own for the portfolios he manages.

Barnett is contracted to run a number of investment trust portfolios, including the £252 million Keystone Investment Trust and the smaller £56 million Invesco Perpetual Select UK.

His approach with both is similar. He does not target yield, which gives a historic snapshot of dividends as a percentage of the current share price, but instead a firm’s potential dividend growth.

‘The ability to grow the dividend will be the key factor driving the share price higher over time,’ he

says, giving rise to the elusive prize of combined income and capital growth.

Key to identifying potential holdings is knowing their bosses and assessing whether or not they put shareholders’ interests first.

‘Do they view the capital that shareholders provide as rare and precious?’ he asks. ‘Do they really understand what investors want?’

In the Select UK portfolio he

holds 60 stocks, on average for four or five years, but monitors about 350 potential holdings.

‘I sit with management all the time, building a relationship over many meetings,’ he says.

It helps that Barnett’s colleagues include Neil Woodford, one of Britain’s best-known investors – and one who is respected and feared in the boardrooms of even the biggest blue-chip companies.

Select UK’s top holdings include BT, which he says ‘is being run much more in shareholders’ interests’, and which he predicts will benefit from households making increasing use of high-speed internet connections.

He likes tobacco firms and pharmaceutical companies, which he says were overvalued in the 1990s but are today cheaper and attractive, poised to benefit

financially from human genome research, among other areas, ‘which are starting to deliver’.

The trust’s shares are in demand because of its recent performance. At 1301⁄2p they are higher than the value of their underlying assets, but over the past year they have traded near to or below that value, so if you wish to buy, monitor both figures.

PROSPECTS: Mark Barnett assesses the views of bosses

Manager puts shareholders first in the hunt for dividend growth

Accounts in this table are independently researched and are ranked purely by the highest rate paid for the appropriate terms. They do not reflect the financial strength or security of the deposit takers. The level of protection varies. For up-to-date details, visit thisismoney.co.uk/safe-savings. To find the best rate, select the sum that you want to invest and then read across the top row for the time you are prepared to lock it away. All rates shown are gross annualised.

Source: DEFAQTO 01844 295454 defaqto.com

iNSTANT ACCESS, PoST, No-NoTiCE ACCoUNT UP To 90 DAyS’ 1 yEAR’S 3 To 5 yEARS’ £ PHoNE oR bRANCH iNTERNET oNly NoTiCE NoTiCE NoTiCE

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1,000 Halifax Coventry bS Aldermore bank of Cyprus Virgin Money Reward Current Account Online Saver (5) 30-day Notice Account (4) 1-year Fixed Rate 5-yr Fixed-rate Bond (55) £5 per month C 1.6% 1.75% iPT 2% FiPT 3% FPT 0845 720 3040 thecoventry.co.uk 0845 604 2678 0845 850 5555 0845 600 4466

5,000 barnsley bS Coventry bS Aldermore bank of Cyprus Virgin Money Triple Access Saver (3) Online Saver (5) 30-day Notice Account (4) 1-year Fixed Rate 5-yr Fixed-rate Bond (55) 1.65% 1.6% 1.75% iPT 2% FiPT 3% FPT 0845 120 0898 thecoventry.co.uk 0845 604 2678 0845 850 5555 0845 600 4466



b = Includes bonus. C = Must deposit £750+ each month and keep account in credit. Must pay out two direct debits each month. £5 per month is net of basic rate tax. F = Fixed rate. i = Internet account. P = Postal account. T = Phone account.

BEST RATE FOR YOUR MONEY

Source: MONEYFACTS moneyfacts.co.uk

Notice Minimum interest Transfers interest Contact or term deposit rate in allowed paid

CASH ISAsCheshire bS Via website None P £1,000 2.30% * Yes YearlyNS&i Via website None H £1 2.25% No YearlyNationwide bS Via branch Instant £1 2.25% * No YearlyDerbyshire bS Via branch Instant £1 2.25% * No Yearly

FIXED-RATE CASH ISAsVirgin Money 0845 600 4466 24/5/14 £1 2.20% Yes YearlyTesco bank 0845 678 5678 1 year H £1 2.05% No YearlyKrbs 0845 122 0022 1 year £1,000 2.01% Yes OMbank of Cyprus Via website 1 year £500 2.00% Yes OM

Coventry bS 0845 766 5522 Age 18 £1 3.25% Yes YearlyNationwide bS 0800 302010 Age 18 £1 3.25% * No YearlyMansfield bS 01246 202055 Age 18 £1 3.05% Yes Yearly

JUNIOR CASH ISAs

* = Introductory rate for a limited period. H = Operated by internet or phone. oM = On maturity. P = Operated by post. All rates are shown as AER. All rates and terms subject to change without notice.

In this tax year, the overall Isa allowance has risen to £11,520, of which a maximum £5,760 may be invested in a cash Isa account, such as those listed here. The annual allowance for Junior Isas is £3,720. Always contact your existing provider before trying to top up or switch Isas.

CASh ISA SELECTION

TOURISTRATES

Mortgages shown are not selected on best headline rate alone, but on the best value overall. Costs per £1,000 assume a 25-year repayment mortgage. l = Free basic legal work for remortgages. o = No charge for overpayments in penalty period. P = £200 cashback for purchases. R = Free/refunded valuation and legal work for remortgages. V = Free/refunded valuation. Source: L&C 0800 953 0500

initial Maximum Monthly cost per £1,000 lender rate Type and duration loan Fee Redemption penalty Notes (repayment loan)

Costs per £1,000 assume a 25-year loan. Some products may not be available to existing borrowers. Some lenders may offer interest-only loans.

OWNER-OCCUPIED RESIDENTIAL MORTGAGES Norwich & Pboro bS 2.24% Fixed for 2 years 60% £295 3% of loan for 2 years LOPV £4.36 Hinckley & Rugby bS 2.75% Fixed for 2 years 80% £990 None LV £4.61 Nationwide 2.74% Fixed for 3 years 70% £99 4% of loan for 3 years OR £4.61 Norwich & Pboro bS 2.74% Fixed for 5 years 60% £295 5% falling to 3% of loan for 5 years LOPV £4.61 Co-operative bank 3.69% Fixed until 31/8/18 85% £999 5% falling to 1% of loan until 31/8/18 OR £5.11 Tesco bank 2.45% Base rate +1.95% until 30/6/15 70% £195 2% of loan until 30/6/15 OR £4.46 Furness bS 2.95% Base rate +2.45% for 2 years 80% £499 3% of loan for 2 years OR £4.72 Nationwide 2.74% Base rate +2.24% for 3 years 70% £99 3% of loan for 3 years OR £4.61 First Direct 2.28% Base rate +1.78% for term 65% £1,999 None L £4.38 Hinckley & Rugby bS 3.79% 1.85% discount for term 85% £1,090 None LV £5.16 BUY-TO-LET MORTGAGES Hinckley & Rugby bS 2.74% 2.9% discount for 2 years 60% £2,499 None V £4.61 Principality bS 3.19% Fixed until 30/6/15 60% £999 4% of loan until 30/6/15 LV £4.84 yorkshire bank 4.99% Fixed until 31/8/18 80% £999 5% falling to 2% of loan until 31/8/18 O £5.84

MORTGAGE BEST BUYS

June 9 • 2013 The Mail on Sunday

FACTS AT A GLANCE INVESCO PERPETUAL SELECT UK EQUITYSIZE AND RETURNS:£56 million. One year, +53%;three years, +88%; five years, +84%.MANAGER AND TENURE:Mark Barnett since November 2006.THE BIG RIVALS:Lowland Investment, Temple Bar, Murray Income.HOW TO INVEST:The trust’s shares are quoted on the London stock market and so can be bought through any broker. Alternatively, Invesco offers an in-house dealing service – call 0800 085 8677.

Sour

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Barnett’s Footsie bets*

*Percentage of portfolio that FTSE 100 stocks represented in May.

Portfolio’s performance boosts shares

June 2008 June 2013

10080604020

0-20-40

Gain (%)

Invesco Perpetual Select UK EquityFTSE All-Share

Percentageof portfolioSectorCompany

BT

British American Tobacco

Imperial Tobacco

AstraZeneca

GlaxoSmithKline

BAE Systems

Thomas Cook

Telecoms & relatedinfrastructure

Tobacco products

Tobacco products

Pharmaceuticals

Pharmaceuticals

Defence & aerospace

Travel services

6%

5%

5%

5%

4%

4%

3%

Simon Boulton 0203 615 0365Graeme Rossiter 0203 615 0366

To advertise in Financial Mail please callMay 26 • 2013 The Mail on Sunday

By HELEN LOVELESS

RELAUNCH: Film boss Tonisha Tagoe

Women entrepreneurs win 40% of start-up cash89FINANCIAL

CIGARETTE advertising has beenbanned on Britain’s TV screens for50 years, but the sight of peoplepuffing away in the commercialbreak may be about to make a shockcomeback.Electronic cigarettes – whichdeliver a dose of nicotine and evenmimic smoke fumes, but withoutburning tobacco – are enjoying rap-idly increasing sales, and London’sadvertising agencies can sense anexciting new opportunity.Traditional cigarette makerBritish American Tobacco –the world’s second-biggest producerand best known for its Dunhill,Pall Mall and Lucky Strike brands– has begun a search for a Londonagency to launch an e-cigarettecalled Vype.

A spokesman for BAT said: ‘Aspart of our harm-reduction approachwe have made no secret of the factthat we are looking at a numberof different product opportu-nities, including e-cigarettes.‘We have also made no secretof the fact the UK is one of themarkets we believe may havepotential for such a product.’BAT’s chief financial officer,Nicandro Durante, has saidtobacco alt

By VICKI OWEN Return of thecigarette adBanned for half a century,tobacco giants are staginga lucrative comeback – butwith an electronic ‘smoke’

BUDDING female entrepreneurshave received more than 40 percent of the money given to4,000 new companies under theGovernment’s Start-Up Loansscheme, Business SecretaryVince Cable will announceon Tuesday.The Government-backedscheme, fronted by entrepreneurand former Dragons’ Den judgeJames Caan, was launched inMay last year.

The figures are seen as amajor boost to Governmentattempts to encourage

more women to start their ownbusiness. About 35 per cent ofthose starting a company inthe UK are female.Cable said: ‘These figures showmore and more women areturning their business ideas intoa reality and becoming theirown boss. I hope this inspireseven more budding femaleentrepreneurs to realisetheir dream of starting andrunning their own business.’

The scheme has been lendingabout £1million every monthand was recently extended until2015, with up to £117.5 millionavailable in total.The aim is to fund 30,000businesses by 2015. The agelimit has been increased from24 to 30 and there are plans tomake loans open to people ofall ages.One entrepreneur who isthankful for the scheme isTonisha Tagoe, 27, who set upproduction company U MediaFilms in 2009 after years spent

working on film and televisiondocumentaries. But a lack offunds meant she was unable toafford enough staff or equipment.This year, Tonisha applied forand received £7,000 throughStart-Up Loans. She has used themoney to market the relaunchof the company and to buyvideo recording equipment.‘Aside from the fundingsupport, I have received a largeamount of emotional andprofessional supportand guidance through thescheme,’ she said.

HELEN LOVELESS

Women entrepreneurs win 40% of start-up cash

Return of the cigarette adBanned for half a century, tobacco giants are staginga lucrative comeback – but with an electronic ‘smoke’

more women to start their own business. About 35 per cent of those starting a company inthe UK are female.Cable said: ‘These figures show more and more women are turning their business ideas into a reality and becoming their own boss. I hope this inspires even more budding female entrepreneurs to realise their dream of starting and running their own business.’

The scheme has been lending about £1million every month and was recently extended until 2015, with up to £117.5available in total.The aim is to fund 30,000 businesses by 2015. The age limit has been increased from 24 to 30 and there are plans to make loans open to people of all ages.One entrepreneur who is thankful for the scheme is Tonisha Tagoe, 27, who set up production company U Media Films in 2009 after years spent

65% of investorsmake buy-to-lettheir pension

May 26 • 2013 The Mail on Sunday

By Jeff Prestridge

93

Personal FinanceDefiniTive newS anD aDvice To SafeguarD your wealTh

MoS study reveals huge rush intoproperty as savings rates languish

POOR interest rates on sav-ings, a generation forced torent rather than buy, anddisappointment with theperformance of pensionfunds are persuading more

people to turn to buy-to-let as a key

provider of income.A major survey by The Mail on

Sunday among prospective andi di

The key findings of our survey

CTUR

E: CH

RISTO

PHER

COX

Buy-To-leT Special Report The new landlords’ investment boom

OUR groundbreaking readersurvey on buy-to-let indicatesstrong confidence in thisburgeoning investment sector.

More than a quarter (27 percent) of investors are planning toadd to their portfolio in the nextyear, while 33 per cent are‘considering’ further purchases.

costs with 47 per cent saying theyare ‘not very surprised’ by thecosts of running their portfolio.

Of those buying in the nextyear, 67 per cent will borrow.Some 66 per cent plan to borrowmore than 60 per cent of theproperty value while 78 per centwill buy in the area where they

l 85 per

65% of investorsmake buy-to-let their pension

Personal Financeive newSive newS anD aDvice Dvice D To Safeguar

MoS study reveals huge rush into property as savings rates languish

The key findings of our survey

Special Report The new landlords’ investment boom

costs with 47 per cent saying they are ‘not very surprised’ by the costs of running their portfolio.

Of those buying in the next year, 67 per cent will borrow. Some 66 per cent plan to borrow more than 60 per cent of the property value while 78 per cent will buy in the area where they live. Apart from loans, 85 per

The Mail on Sunday May 26 • 2013

[email protected]

88 FINANCIAL

Bailed out banks

‘fought regulator

over crisis funds’By SIMON WATKINS

Rate rise is real test of a recovery

THE International

Monetary Fund

changes its mind so

often it is hard to

know what it thinks

about the British

economy. Last week it issued its

latest formal verdict and

managed to come up with

something for everyone.

It noted an ‘improvement in

economic and financial

conditions’, which was

‘encouraging’. But it also warned:

‘The UK is still a long way from a

strong and sustainable recovery.’

Sadly, I suspect the latter

comment is the more important

point and the unbalanced and

fragile nature of the recovery and

financial confidence, not just in

Britain but around the world, was

made clear by last week’s stock

market gyrations.

The IMF has changed its mind

on Britain’s economy so

frequently in recent years that,

increasingly, many economists

are dismissing its reports.

Two years ago, it was a

cheerleader for British austerity.

Earlier this year, one of its most

senior economists warned the

Treasury that its measures were

‘playing with fire’. Last week’s

report seemed like an attempt

to placate everyone.

On balance, though, it was not

an optimistic document. Its

emphasis was on the fragility of

the recovery and that fiscal

tightening (IMF-speak for

austerity) ‘will be a drag on

growth’.There have been signs of

recovery in Britain, but all too

easily we forget that the economy

is, along with those elsewhere,

still in intensive care. The slump

in shares prices around the world

last week was a reminder of that.

The most credible explanation

for the falls was that traders took

fright at suggestions by America’s

central banker, Ben Bernanke,

that it may soon be time to stop

quantitative easing – better

known as money printing.

This policy, carried out by the

central banks buying up assets

with newly created money, has

been pursued by many, including

the Bank of England, alongside

rock-bottom base rates, currently

0.5 per cent in the UK.

While these policies of monetary

easing may be necessary, they

have not brought back strong

economic growth. They have also

had side effects, such as a stock

market boom.

Much of the money injected

into the system has been used to

buy shares and it is the idea

that this money tap might be

turned off that has scared the

stock market.

The equivalent for most of the

rest of the economy would be the

expectation that interest rates are

about to rise. How many

companies would fail if we

returned to base rates at three,

four or five per cent? How many

of us could keep paying our

mortgages if that happened?

What other spending would we

have to cut?

Fortunately, for most of us, rates

are not expected to rise soon. But

this is not a sign of strength – it is

a sign of the economy’s weakness.

Forget trying to decode the IMF,

the easiest test for when we have

a sustainable recovery will be

when businesses and households

can contemplate higher interest

rates without fear.

TALKS BEGIN: The luxury chocolatier has 66 UK stores and four abroad

CITY EDITOR

bySimonwatkins

ROyAL Bank of Scotland was

‘dragged kicking and screaming’

by the regulator to sell assets to

help strengthen its emergency

reserves while Lloyds ‘dragged its

ding to sources close to Sale of Hotel Chocolat

t up to £100m

PICTU

RE:J

ASON

ALDE

N

sell part of Citizens in a float within

two years.

The PRA declined to comment on

claims that the talks with state-

ed banks had been fraught.

sh uld be no confu-h ve

the new capital targets by selling off

businesses, rather than having to

ask investors for extra capital.

The PRA itself has faced fierce

criticism from bankers over the

capital assessment process, which

has been under way since Christmas

and has sparked speculation of inad-

equate capital reserves at banks.

Critics claim the Bank of England

its two regulatory arms, the

P licy Com-

The Mail on Sunday May 26 • 2013

[email protected]

Bailed out banks

‘fought regulator

over crisis funds’

Rate rise is real test of a recovery

‘playing with fire’. Last week’s

report seemed like an attempt

to placate everyone.

On balance, though, it was not

an optimistic document. Its

emphasis was on the fragility of

the recovery and that fiscal

tightening (IMF-speak for

austerity) ‘will be a drag on

There have been signs of

recovery in Britain, but all too

easily we forget that the economy

is, along with those elsewhere,

still in intensive care. The slump

in shares prices around the world

last week was a reminder of that.

The most credible explanation

for the falls was that traders took

fright at suggestions by America’s

central banker, Ben Bernanke,

that it may soon be time to stop

quantitative easing – better

known as money printing.

This policy, carried out by the

central banks buying up assets

with newly created money, has

been pursued by many, including

the Bank of England, alongside

rock-bottom base rates, currently

0.5 per cent in the UK.

While these policies of monetary

easing may be necessary, they

have not brought back strong

economic growth. They have also

had side effects, such as a stock

market boom.

Much of the money injected

into the system has been used to

buy shares and it is the idea

that this money tap might be

turned off that has scared the

stock market.

The equivalent for most of the

rest of the economy would be the

expectation that interest rates are

about to rise. How many

companies would fail if we

returned to base rates at three,

four or five per cent? How many

of us could keep paying our

mortgages if that happened?

What other spending would we

have to cut?

Fortunately, for most of us, rates

are not expected to rise soon. But

this is not a sign of strength – it is

a sign of the economy’s weakness.

Forget trying to decode the IMF,

the easiest test for when we have

a sustainable recovery will be

when businesses and households

can contemplate higher interest

rates without fear.

TALKS BEGIN: The luxury chocolatier has 66 UK stores and four abroad

Sale of Hotel Chocolat

may net up to £100m

the new capital targets by selling off

businesses, rather than having to

ask investors for extra capital.

The PRA itself has faced fierce

criticism from bankers over the

capital assessment process, which

has been under way since Christmas

and has sparked speculation of inad-

equate capital reserves at banks.

Critics claim the Bank of England

through its two regulatory arms, the

PRA and the Financial Policy Com-

May 26 • 2013 The Mail on Sunday

Pubs set to sue Coalition

over beer sales shake-up

‘Thousands of

closures’ fear

if tenants win

more powerGEORGE Osborne has kicked off

the search for a banking expert to

handle the sale of the taxpayers’

stakes in Royal Bank of Scotland

and Lloyds.

The Treasury has appointed City

headhunter Spencer Stuart to find

a new boss for UK Financial

Investments, the body that controls

its holdings in the banks. The

successful candidate is likely to

h job of selling the stakes.

pect thesta ting gun

87

Financialn SIMON WATKINS 88 n MIDAS 90 n SMAll BuSINeSS 92 n PerSONAl FINANce 93–103

POUND BUYS

1.1702euros

DOWN 0.65¢

FTSE 100

6,654.34

DOWN 68.72

GOlD

$1,390.25

UP 21.5Figures show market changes on the week

1.5115dollars

Mail on Sunday

DOWN 1.27¢

DOWN 0.65¢

Figures show market changes on the week

threatened to sue the

rts if it presses

Treasury starts

hunt for chief

to sell UK’s

bank stakesBy ALEX HAWKES

B SARAH BRIDGE

Reprinted with permission by The Reprint and Licensing Centre. (www.rl-centre.com / 0207 501 1085). Not to be reproduced without authorisation.

JUNE 22 • 2014 The Mail on Sunday The Mail on Sunday December 3 • 2017

MOST people invest in the United States so that they can share in

the success of the globe’s most

iconic brands – the Apples, Facebooks and

Microsofts of this world.But an increasing number of

investors are also viewing the market across the pond as an alternative source of dividend income, a complement to the dividends they reap from UK companies.

Income is not commonly associated with the United States but a number of its longstanding companies – the likes of Coca-Cola, Colgate-Palmolive, Johnson & Johnson and Procter & Gamble – have annual dividend growth records going back more than 50 years.

It is a healthy dividend backdrop which has resulted in the setting up of a number of US trusts and funds with an income bent. Among them is JP Morgan US Equity Income, a £3.7 billion fund that has been managed by Clare Hart from New York since launch nearly nine years ago.

Under Hart’s command, the fund has enjoyed relative success, outperforming the S&P 500 Index over its lifetime – which is no mean achievement.

Hart has stuck to her guns, n Jeff Prestridge

CONSERVATIVE: Clare Hart is building a diversified fund

Why the US can be the real thing for dividend income

86 personal finance

Company Sector

Bank of America Financials

Wells Fargo Financials

Johnson & Johnson Health care

PNC Financial Services FInancials

FACTS AT A GLANCE

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Dec 2017Dec 2012

Steady returns from income stocks How the fund is invested by sector (%)

Top 5 holdings (%)

SIZE AND RETURNS:£3.7billion. One year, +9%;three years, +49%; five years, +126%.MANAGERS AND TENURE:Clare Hart and Jonathan Simon, since launch (December 2008).THE BIG RIVALS:They include funds Jupiter North American Income, Marlborough US Multi-Cap Income, Neptune US Income and Threadneedle US Equity Income. Investment trusts include BlackRock North American Income and The North American Income Trust.HOW TO INVEST:The fund is best bought via anonline supermarket. The ongoing annual charge is 0.93%.

JPMORGAN US EQUITY INCOME

140

120

100

80

60

40

20

0

-20

JPM US Equity IncomeFTSE All-Share Index

Total returns (%) Other 8

% of fundSectorCompany

Financials31

Informationtechnology 12

Cash 1

Bank of AmericaWells FargoJohnson & JohnsonApplePNC Financial Services

33333

FinancialsFinancialsHealth careInformation technologyFInancials

Health care 11Energy 10Industrials 10

Consumerstaples 8

Consumerdiscretionary5

Utilities 4

employing a few basic rules to ensure the fund does not go off the proverbial rails. Conservatism is her watchword. She is no gung-ho investor. The fund is diversified, comprising more than 90 holdings spread across most – not all – of the market’s key sectors.

Although nearly a third of the portfolio is in financial companies, the stocks in this sector are also sufficiently different not to keep Hart awake at night.

She says: ‘As a manager, you are looking at how stocks will perform in different scenarios. What you do not want is all of them responding the same way to

one piece of negative news. Yes, you want to build a portfolio with upside potential but you have to look at the downside as well. That means constructing a diversified portfolio.’

Reinforcing this message, no stock is allowed to represent more than five per cent of the portfolio which means the biggest holding is Bank of America – at just 3.4 per cent. Hart calls it ‘risk mitigation’.

In terms of income, Hart will not buy a company unless it has a dividend yield of at least two per cent. If the yield falls below this level she will not sell immediately although if it is indicative of a

stock being overvalued she will take the profits and look for other opportunities.

Her investment style is such that she tends to hold stocks rather than trade them in order to deliver returns. ‘I am looking for quality companies which have the ability to pay a stream of growing dividends. I do not fly in and out of companies.’

Although some experts believe the US market is overvalued, Hart does not agree. ‘Yes, the US equity market is not cheap, but it is not the most expensive I have seen it either. Earnings growth can support the market at its current level,’ she says. Hart’s

search for income-friendly companies means she holds some of the companies with longstanding records of dividend growth (Johnson & Johnson is a top ten holding). It also results in exposure to cash generative companies such as Apple and Microsoft and some businesses she describes as ‘unsung heroes’ – the likes of Texas Instruments and Analogue Devices.

Hart is assisted by colleague Jonathan Simon, but she does all the trades within the fund. ‘Jonathan would only step in if I got run over or abducted by aliens,’ she adds.

EASY ACCESS

Notice Minimum Account name or term deposit AER Notes

Accounts in this table represent the best rates available from the whole savings market – based on four categories. They do not reflect the financial strength of the provider, but they are all protected by the Financial Services Compensation Scheme or the European equivalent. The safety limit rose to £85,000 on January 30, 2017. The European limit is €100,000.

BesT raTes for YoUr saVinGs NOTICE ACCOUNTS

FIXED-RATE BONDS

* Introductory rate for a limited period. A = Covered by European Compensation Scheme. B = Open in branch. BS = Building society. C = Additional £10 cashback each month, subject to terms. D = Monthly funding requirement. I = Open online. P = Open by post. X = Maximum of four interest withdrawals and three capital withdrawals per year.

CURRENT ACCOUNTS PAYING INTEREST

Charter Savings Bank 1-year Fixed-rate Bond 1 year £1,000 1.81% I Secure Trust Bank 2-year Fixed-rate Bond (December 23, 2019) 2 years £1,000 2.06% I The Access Bank UK Sensible Savings – 3-year Fixed-rate Bond 3 years £5,000 2.25% IP Secure Trust Bank 5-year Fixed-rate Bond (December 22, 2022) 5 years £1,000 2.51% I

Secure Trust Bank 180-day Notice Account 180 days £1,000 1.66% IX Secure Trust Bank 120-day Notice Account 120 days £1,000 1.56% IX Bank and Clients 90-day Notice Account 90 days £1,000 1.45% P Kent Reliance 60-day notice account – Issue 19 60 days £1,000 1.35% BIP

Birmingham Midshires Internet Saver Account – £1 1.45%* I RCI Bank Freedom Savings Account – £100 1.30% AI Bath BS Direct Saver – £2,500 1.30% BP Nottingham BS eSaver Instant Issue 8 – £1,000 1.25% I

Nationwide BS FlexDirect – £1 5.00%* D Tesco Bank Current Account – £0 3.00% D TSB Bank Classic Plus Account – £1 3.00% CD Bank of Scotland Vantage Current Account – £1 2.00% D

For more details, ring:

0800 010 6007

Notice Minimum Transfers or term deposit AER in allowed Notes

Savers can put £20,000 in a tax-friendly Individual Savings Account in the current tax year ending April 5, 2018. The rules allow you to put your entire allowance into cash – or if you prefer, equities or peer-to-peer lending. Alternatively, you can spread your money across a mix. Savers are able to transfer equity-based Isas to cash Isas and vice-versa. The annual limit for Junior Isas is £4,128. Savers aged between 16 and 18 can save a fur ther £20,000 into a cash Isa but they cannot open an equity Isa.

BesT raTes for YoUr casH isa

Bath BS Easy access £1 1.30% No BP Hinckley and Rugby BS 120 days £500 1.20% Yes BP Shawbrook Bank Easy access £1,000 1.10% Yes IPost Office Easy access £100 1.07%* Yes ISainsbury’s Bank Easy access £500 1.06% Yes IT

FIXED-RATE CASH ISAs

AA 1 year £500 1.36% Yes I Charter Savings Bank 1 year £1,000 1.36% Yes I Charter Savings Bank 2 years £1,000 1.72% Yes I Leeds BS 3 years £100 1.85% Yes BIP United Trust Bank 5 years £5,000 2.20% Yes PW

Coventry BS Age 18 £1 3.50% Yes BPNationwide BS Age 18 £1 3.25% Yes BITesco Bank Age 18 £1 3.15% Yes IT Halifax Age 18 £1 3.00% Yes BITSB Bank Age 18 £1 3.00% Yes B

JUNIOR CASH ISAs

*Introductory rate for a limited period. B = Open in branch. BS = Building society. I = Open online. P = Open by post. T = Open by telephone. W = Transfers in only, no new non-ISA funds can be deposited.


0800 010 6007

VARIABLE RATE CASH ISAs

Source: FAIRFX

Australia Canada

ChinaCzech Rep

Denmark Egypt

Eurozone Hong Kong

Hungary IcelandJapan

Mexico New Zealand

Norway Poland

Singapore South Africa

SwedenSwitzerland

Thailand Turkey

UAE US

dollarsdollarsyuankorunykronerpoundseurosdollarsforintkronuryenpesosdollarskronerzlotydollarsrandkronorfrancsbahtliredirhamsdollars

1.7401.6938.59428.128.26422.621.11010.29344.5130.3148.524.081.93010.924.6021.77418.0110.991.29942.635.0824.8501.318

The rates shown are for buying currency online. The difference in the amount of travel money you can buy per £1 varies substantially by provider. Research has shown that travellers receive less for their money the closer they are to an airport.

ToUrisTraTes

Costs per £1,000 assume a 25-year repayment loan. Some lenders may offer interest-only loans. Mortgages shown are not selected on best headline rate alone, but on best value overall. BS = Building Society. D = £500 cashback. E = £500 cashback for purchases. F = £500 cashback for first-time buyers and remortgages. L = Free basic legal work for remortgages. O = Overpayments may be made without charge during penalty period. P = Purchase only. V = Free/refunded valuation.

MorTGaGe BesT BUYs

Mortgages in this table represent the best available from across the market – residential and buy-to-let. Deals cover fixed-rate loans, discounted offers and mortgages that track the base rate plus a predetermined premium for an agreed period. Loans are for first-time buyers, movers and those remortgaging. They all require a deposit or equity in the home.

For more details, ring: 0800 953 0500

Initial Maximum Monthly cost per £1,000 Lender rate Type and duration loan Fee Redemption penalty Notes (repayment loan)

OWNER-OCCUPIED RESIDENTIAL MORTGAGES Sainsbury’s Bank 1.19% Fixed until 31/3/20 60% £745 2% falling to 1% of loan until 31/3/20 LOV £3.86 Yorkshire BS 3.39% Fixed until 29/2/20 95% £995 2% falling to 1% of loan until 29/2/20 EOP £4.95 Nationwide 1.79% Fixed for 5 years 60% £999 5% reducing to 1% of loan for 5 years FOV £4.14 Barclays 2.49% Fixed until 31/1/23 90% £999 3% of loan until 31/1/23 LOV £4.48 Coventry BS 2.19% Fixed until 31/12/24 65% £999 5% falling to 1% of loan until 31/12/24 ELOV £4.33 HSBC 1.24% Base rate + 0.74% for 2 years 60% £995 None LV £3.88 Hanley Economic BS 3.10% 2.09% discount for 2 years 95% £250 3% of loan for 2 years OPV £4.79 Nationwide BS 1.34% Base rate + 0.84% for 2 years 75% £999 None FV £3.92 Coventry BS 1.64% Variable for term 50% £999 None LV £4.07 First Direct 3.24% Base rate +2.74% for term 90% £1,450 None L £4.87 BUY-TO-LET MORTGAGES Virgin Money 2.04% Fixed until 1/4/20 75% £995 1.5% of loan until 1/4/20 DO £4.26 Hanley Economic BS 2.89% 2.30% discount for 2 years 80% £0 2% of loan for 2 years O £4.69 Leeds BS 2.19% Fixed until 31/1/23 60% £1,999 5% falling to 2% of loan until 31/1/23 LOV £4.33

The Mail on Sunday December 3 • 2017












86 personal finance

Company Sector





FACTS AT A GLANCE

Sour

ce: F

INAN

CIAL E

XPRE

SS

Dec 2017Dec 2012


Top 5 holdings (%)



140

120

100

80

60

40

20

0

-20




Financials31


Cash 1


33333



Consumerstaples 8


Utilities 4












EASY ACCESS




FIXED-RATE BONDS








0800 010 6007








JUNIOR CASH ISAs



0800 010 6007


Source: FAIRFX

Australia Canada

ChinaCzech Rep

Denmark Egypt

Eurozone Hong Kong


Mexico New Zealand

Norway Poland


SwedenSwitzerland

Thailand Turkey

UAE US


1.7401.6938.59428.128.26422.621.11010.29344.5130.3148.524.081.93010.924.6021.77418.0110.991.29942.635.0824.8501.318


ToUrisTraTes


MorTGaGe BesT BUYs

















86 personal finance

Company Sector





FACTS AT A GLANCE

Sour

ce: F

INAN

CIAL E

XPRE

SS

Dec 2017Dec 2012


Top 5 holdings (%)



140

120

100

80

60

40

20

0

-20




Financials31


Cash 1


33333



Consumerstaples 8


Utilities 4












EASY ACCESS




FIXED-RATE BONDS








0800 010 6007








JUNIOR CASH ISAs



0800 010 6007


Source: FAIRFX

Australia Canada

ChinaCzech Rep

Denmark Egypt

Eurozone Hong Kong


Mexico New Zealand

Norway Poland


SwedenSwitzerland

Thailand Turkey

UAE US


1.7401.6938.59428.128.26422.621.11010.29344.5130.3148.524.081.93010.924.6021.77418.0110.991.29942.635.0824.8501.318


ToUrisTraTes


MorTGaGe BesT BUYs

















86 personal finance

Company Sector





FACTS AT A GLANCE

Sour

ce: F

INAN

CIAL E

XPRE

SS

Dec 2017Dec 2012


Top 5 holdings (%)



140

120

100

80

60

40

20

0

-20




Financials31


Cash 1


33333



Consumerstaples 8


Utilities 4












EASY ACCESS




FIXED-RATE BONDS








0800 010 6007








JUNIOR CASH ISAs



0800 010 6007


Source: FAIRFX

Australia Canada

ChinaCzech Rep

Denmark Egypt

Eurozone Hong Kong


Mexico New Zealand

Norway Poland


SwedenSwitzerland

Thailand Turkey

UAE US


1.7401.6938.59428.128.26422.621.11010.29344.5130.3148.524.081.93010.924.6021.77418.0110.991.29942.635.0824.8501.318


ToUrisTraTes


MorTGaGe BesT BUYs

















86 personal finance

Company Sector





FACTS AT A GLANCE

Sour

ce: F

INAN

CIAL E

XPRE

SS

Dec 2017Dec 2012


Top 5 holdings (%)



140

120

100

80

60

40

20

0

-20




Financials31


Cash 1


33333



Consumerstaples 8


Utilities 4












EASY ACCESS




FIXED-RATE BONDS








0800 010 6007








JUNIOR CASH ISAs



0800 010 6007


Source: FAIRFX

Australia Canada

ChinaCzech Rep

Denmark Egypt

Eurozone Hong Kong


Mexico New Zealand

Norway Poland


SwedenSwitzerland

Thailand Turkey

UAE US


1.7401.6938.59428.128.26422.621.11010.29344.5130.3148.524.081.93010.924.6021.77418.0110.991.29942.635.0824.8501.318


ToUrisTraTes


MorTGaGe BesT BUYs





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