The Evenlode Income fund has almost exactly doubled investors money over the past five years. In that time period, the average fund in the IA UK All Companies sector has returned 64 per cent.
The fund has a yield of 3.3 per cent.
The FTSE 100 stock in which he has started to invest in advertising, marketing and public relations firm, WPP, the company run by Martin Sorrell.
Yarrow remarked that, ‘we added a small holding in WPP, a global market leader in the advertising, marketing and communications sector. WPP has a diverse customer list (including many Evenlode holdings) and a business model increasingly oriented to digital services and data analytics. The company’s shares trade on a 3.7 per cent dividend yield backed by strong cash generation, and in our view offer good potential for dividend growth over time.
Evenlode’s largest positive contributors to return during the month were Unilever, Smiths Group and JLT. Unilever performed well ahead of its strategic update, which was subsequently released in early April and has resulted in upgrades to medium-term guidance. Smiths Group and JLT benefited from reassuring results.’
Two stocks that have been relative under-performers for the Evenlode Income fund, are Sage and Informa.
But Yarrow is sticking with both.
He commented, ‘Sage fell back on no specific news, whilst Informa released final results in early March. We continue to think both companies offer attractive long-term potential thanks to strong brands, embedded customer relationships and healthy recurring cash flows.’
Sage is a provider of accountancy software, and many of its customers have used the products for a long time.
The largest investments in the Evenlode Income fund are Unilever Diageo and Glaxosmithkline. The fund has returned 46 per cent over the past three years, compared to 24 per cent for the average fund in the sector in the same time period.