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EdenTree Higher Income – Robin Hepworth to step down as lead manager

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

Robin Hepworth will step down as lead manager of the EdenTree Higher Income fund from 1 November 2020. He will also give up his position as EdenTree's Chief Investment Officer. Hepworth will remain co-manager of the fund and will reduce his hours to three days per week.

Chris Hiorns will become lead manager, meaning he'll have final say on what makes it in and out of the fund. He will run the fund alongside two similar multi-asset portfolios and two European equity funds. The manager will step back from a number of other responsibilities, including managing two bond funds, to free up time to manage the Higher Income fund. It will be his largest fund, so should receive the lion's share of his attention.

As co-manager, Hepworth will continue to take an active role in the fund. He will attend company meetings, carry out analysis, help make investment and asset allocation decisions, and provide advice and support to Hiorns.

The managers will also continue to be supported by EdenTree's wider Investment Team, which includes a range of equity and fixed interest specialists, as well as co-managers Thomas Fitzgerald and David Katimbo-Mugwanya.

The new lead manager will continue to implement the same investment process, which involves investing in companies that other investors ignore – possibly because something's gone wrong, or the company's in an unfashionable area – also known as value investing. Whatever the reason, the setback must be temporary and there must be clear potential for improvement. He'll also adjust the fund's exposure to shares and bonds depending on his outlook for the economy, and aim to provide a high and growing income.

Who is the new manager?

Chris Hiorns joined EdenTree in 1996 after gaining a Masters in Economics at University College London. Like Hepworth, he worked his way up through the business over a period of decades and now serves as Head of Multi Asset and Senior Fund Manager.

He's worked with Hepworth for nearly 25 years and has plenty of fund management experience. Our analysis of a portfolio he's managed since 2008, which is invested similarly to the Higher Income fund, suggests he's added lots of value for investors, through investments in UK shares, overseas shares and fixed interest investments.

Hiorns and Hepworth share a similar investing philosophy. They prefer to invest in companies that have been overlooked by other investors, and pay an above-average yield. They also agree that there's little value in fixed interest markets at the moment, and prefer to invest in more niche areas that are still paying an attractive yield, such as preference shares and Permanent Interest Bearing Shares (similar to bonds but issued by building societies to raise funds). For these reasons, we expect there to be a high degree of continuity when Hiorns officially takes control of the fund.

What happens now?

It's always disappointing when an experienced fund manager steps down, but we're encouraged that the new manager will continue to benefit from Hepworth's input for a number of years to come.

Our analysis of Hiorns' long-term track record, combined with Hepworth's experience and track record, leads us to believe the managers can deliver good long term performance, although there are no guarantees. The fund therefore retains its place on the Wealth Shortlist of funds chosen by our analysts for their long-term performance potential. We'll continue to monitor the situation and speak to the new manager over the coming weeks and months. We will let investors know if our view on the fund changes.

Find out more about EdenTree Higher Income including charges

Edentree Higher Income Key investor information

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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