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EdenTree Higher Income Fund Class B - Income (GBP)

Sell:131.10p Buy:131.10p Change: 1.80p (1.35%)
Prices as at 26 February 2021
Change: 1.80p (1.35%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 26 February 2021
Change: 1.80p (1.35%)
Prices as at 26 February 2021
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund is on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. However, this is not a recommendation to buy.

This fund is managed by Robin Hepworth, one of the most experienced fund managers in the UK. He has a superb track record of blending shares and bonds to deliver an attractive income and capital growth over the long term. We think his experience, disciplined approach, and excellent track record make this one of best funds in the sector. There's no guarantee how the fund will perform in the future.

We think the fund's a great choice for income investors, but it provides the potential for growth over the long term as well. Some investments in bonds and cash could offer some stability compared to a fund invested entirely in shares.

Our view on the sector

Funds in this sector do what they say on the tin - they aim to pay a high income to investors. There's more than one way to achieve this though. Each fund uses a different approach and invests in different areas. Some focus on bonds. They tend to pay a fixed rate of income, but the amount varies from bond to bond. Government bonds are perceived to be lower risk and pay a lower income to reflect this. Corporate bonds offer higher yields because of the extra risk taken when lending to companies. Bonds can be less volatile than company shares, but offer less potential to grow your income and initial investment. Other funds focus on dividend-paying shares and offer more potential for long-term growth. There are also funds with the flexibility to invest in all kinds of investments. In addition to shares and bonds, they might also invest in currencies, property or commodities.

Performance Analysis

Robin Hepworth has done an excellent job for investors since the fund launched. It's performed much better than the average fund in the sector and grown more than the UK stock market. Sometimes his approach will go out of favour and performance won't be as good. This is true of any fund manager and past performance isn't a guide to the future.

Hepworth has also successfully changed the amount invested in different shares and bonds to generate an attractive income. We think he can do this over the long run.

We normally expect his approach to offer some shelter when markets fall, but not perform quite as well when they rise strongly. Not losing as much in the tougher times means there's less to make up in the good times. This can lead to excellent long-term performance, but there are no guarantees.

Investment Philosophy

Robin Hepworth invests in out-of-favour companies. This could be because something has gone wrong, or the company is in an unfashionable area. Whatever the reason, the setback must be temporary. The manager won't invest unless he sees the potential for business improvement and share price recovery. This often takes time, so he invests for the long-term.

He invests more in shares when the outlook for companies to grow profits and dividends is good. When it's less certain he'll invest more in bonds. Bonds can offer an attractive income and their prices haven't tended to rise and fall as much as share prices. They can reduce volatility, but also hamper gains.

Process and Portfolio Construction

Robin Hepworth invests in shares, bonds and cash. He'll change the amount invested in each area over time, depending on where he sees the most opportunity. In recent years the amount invested in shares has increased to around 75%. They've continued to offer an attractive and growing income, while income from bonds and cash has dwindled. He usually focuses on UK companies, but also invests in America, Europe, and higher-risk Asian and emerging markets.

Some corporate and higher-risk high-yield bonds are held as it's still possible to find some income here. They also help diversify the fund. We think the manager will increase bond investments again if yields become attractive, or the outlook for shares worsens. This is partly why we like the fund.

Please note the fund's charges can be taken from capital. This increases the yield, but reduces the potential for capital growth.

question mark Manager Track Record Based on HL Quantitative Research

  • EdenTree - Higher Income A
  • IA Mixed Investment 40-85% Shares

Fund Track Record

26/02/16 to 26/02/17 26/02/17 to 26/02/18 26/02/18 to 26/02/19 26/02/19 to 26/02/20 26/02/20 to 26/02/21
Annual return 19.19% 6.00% 2.33% 2.11% 2.40%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

EdenTree's (previously Ecclesiastical) Investment Management business was established in 1988. Originally offering only ethically screened funds, the range developed to include non-screened funds in 1994. The business is owned by the Allchurches Trust Charity which distributes a proportion of the company's profits for the benefit of the church and community.

Information about the fund

Fund manager biography

manager photo
Manager Name: Thomas Fitzgerald
Manager start date: 1 September 2016
Manager located in: none

Tom joined EdenTree in 2011 after completing a BSc in Economics and Business Management at Oxford Brookes University. He has completed his IMC and is currently studying for the CFA.

manager photo
Manager Name: David Katimbo-Mugwanya
Manager start date: 1 September 2016
Manager located in: none

David joined EdenTree in 2015 from Epworth Investment Management. He has a wealth of experience in UK Fixed Interest Portfolios and has previously managed over £700m for Institutional Pension Funds, Insurance firms and Charities. David graduated from University of Essex with a BSc in Economics. David has been a CFA Charterholder since 2014.

manager photo
Manager Name: Rob Hepworth
Manager start date: 17 November 1994
Manager located in: Billiter Street, London

Rob joined EdenTree as General Investment Analyst in 1988, and was appointed Fund Manager of the Pension Fund in 1990 and the Higher Income Fund in 1994. He has managed the Amity International Fund since its launch in 1999, and co-manages the Amity Sterling Bond Fund with Chris Hiorns.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account