‘UK banks are last place an investor should be’
Fund manager Robin Hepworth tells Emma Wall why he is steering clear of Barclays.
By Emma Wall
11:30AM BST 28 Jun 2012
http://www.telegraph.co.uk/finance/personalfinance/investing/9357096/UK-banks-are-last-place-an-investor-should-be.html
Ecclesiastical was originally formed 125 years ago to serve the church’s financial needs. Now, it offers mortgages, insurance, financial advise and investments to retail client, pension funds, schools, charities and care homes.
And whether it’s the influence from on high or not, the fund managers manage a pretty impressive performance.
The investment range was launched 20 years ago, and aside from the ethically invested Amity range – four open ended funds which do not invest in alcohol, tobacco and strategic armaments, gambling and publication of violent or pornographic materials – there are two non-screened funds, the Ecclesiastical UK Equity Growth Fund and the Higher Income Fund.
The Higher Income Fund is run by Robin Hepworth, who has a multi-asset remit meaning he can invest in equities, bonds and cash.
While there is a rather large initial charge of 5pc, the fund has a low minimum investment threshold of just £200, compared to the average of £1,000 – in keeping with its apostolic roots.
The fund may not employ screening, but that does not mean Mr Hepworth is not conservative with his investors money.
He recently reduced the equity exposure on the fund from 70pc to 60pc – even though equities are currently offering better yields than bonds.
Speaking in this week’s Your Money Their Hands video he said: “We think there is too much risk on the equity side at the moment. Government bonds are not offering attractive yields – but there are places in the fixed interest land that look attractive. Corporate bonds that manage 5pc or 6pc, and preference shares from quality names are yielding up to 7pc.”
A large portion of the Higher Income fund is invested in the topical financials sector, surprising for a fund manager who views equities as a whole as risky.
The fund is 22pc invested in financials, though Mr Hepworth is quick to clarify that this does not mean he is bullish on Barclays.
“We have had very little exposure to UK banks for around five years, and we maintain that call. UK banks are poorly funded and undercapitalised,” he said. “UK banks are the last place an investor should be.”
