Matt Hudson, manager of the Cazenove UK Equity Income Fund, is beginning to tilt the portfolio away from early cycle stocks and position it for the later recovery stages of the business cycle.
The Cazenove UK Equity Income Fund adopts a top-down business cycle approach, and combines three primary return drivers – premium yield stocks, capital returns and superior dividend growers – to maximise both income and capital returns for investors.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
By understanding the key economic themes and how they will impact stocks and sectors within the market, Hudson seeks to position the portfolio to take advantage of the opportunities offered by the business cycle.
As the cycle moves into the later stages of the recovery, Hudson is seeing opportunities in later cycle stocks, in particular within industrial cyclicals, support services and, selectively, growth defensives that will benefit from the current phase of the cycle.
In an environment where yields continue to fall, Hudson has been adding to the ‘dividend growers’ component of the fund, focusing on stocks which can deliver dividend growth across the cycle and for opportunities in later style stage cyclicals, with the potential for dividend recovery.
Over a three and five year period the fund is top decile and has been ranked first quartile in 2010, 2011 and 2012. Year to date the fund has returned 25.27% compared to the IMA UK Equity Income sector which has returned 17.63%.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataMatt Hudson, manager of the Cazenove UK Equity Income fund said: "We have already seen early cycle stocks outperform the market, for example many consumer cyclicals stocks have already responded to the improvement in activity. We are now seeing opportunities in later cycle stocks in particular industrial cyclicals, support services and, selectively growth defensives. After the market’s pre-occupation with safe high yield stocks, the most exciting opportunity for UK income investors is dividend growth, especially given the expectations for dividend growth the market is implying. "
Robin Stoakley, managing director of UK Intermediary at Schroders said: "Cazenove UK Equity Income is a fund for all seasons. Over a one, three and five year period the fund has outperformed its peers and is an outstanding choice in the sector."
