SLI’s Moore to boost mid-cap exposure in Equity Income trust

Standard Life Investments’ Thomas Moore is set to shake up holdings in the group’s £107m Equity Income trust when he takes over as lead manager next year.

In the trust’s annual results last week, the board announced Moore has been appointed co-manager, alongside Karen Robertson, and is set to become sole manager next year. Moore said he will revamp portfolio construction, boosting exposure to FTSE 250 names and giving it a more unconstrained mandate.

The fund is benchmarked to the FTSE All Share, with 76% of the portfolio comprised of FTSE 100 names.

“My intention is to gradually move the portfolio construction towards a slightly less index constrained approach,” said Moore.

“This will lead to a higher weighting in the FTSE 250, which has historically proved to be more robust than the FTSE 100 in growing dividends over the past decade.

“I will place a greater focus on generating consistent income, and taking a less index-constrained approach is perfectly compatible with a focus on this.”

Moore added he will look to incorporate some of his favourite high-yielding stockpicks from his £57m SLI UK Equity Income Unconstrained fund into the trust.

“Many of the top 10 positions in my open-ended fund are high yield stocks, the likes of Royal Dutch Shell, L&G, Imperial Tobacco and RSA.

“The heavy weightings in high yield stocks such as these allow the fund to take positions in some of our favoured stocks across the market, where the yield may be lower but where we expect dividend growth over time.”

His fund has outperformed Robertson’s £756m UK Equity High Income fund over the last three years, delivering 61.4% to investors against Robertson’s 30% return.

Robertson’s fund has also underperformed the UK Equity Income sector average return of 37.4% over three years.

The trust has returned 44.57% over three years to 14 November against a 52.51% sector average, and fell 7.69% over one year against a gain of 2.46% for the sector, according to Morningstar.

SLI said Moore’s appointment as co-manager is not linked to the trust’s performance.

“Thomas has assisted Karen Robertson with the management of the company’s portfolio for the past two years, attending both board meetings and the annual general meeting, and regularly presenting to existing and potential shareholders,” the board said.