3 Top Rated UK Equity Funds for Long Term Investors

Morningstar analyst Peter Brunt urges investors worried about Brexit to focus on the long-term and highlights three highly rated UK equity income funds

Peter Brunt 20 July, 2016 | 10:00AM
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Of the UK equity income fund managers that we spoke to, not one believed that we would vote to leave the EU. While it still isn’t clear what the implications will be, the effect has already been felt in markets, most prominently among banks whose share prices have tumbled. Those funds holding banks will be hurt, but it could also be deemed a buying opportunity as markets often overreact. Domestic facing stocks have also been hit hard, exemplified by housebuilders.

Given that mid-caps tend to be more domestic facing, it is no surprise that the FTSE 250 has been hit harder than the FTSE 100, many of whose constituents have a significant proportion of their revenues in USD. Looking forward, the uncertainty arising from the Brexit vote may give rise to a change in the market dynamics that have been favourable for mid-caps and funds with large allocations to them. While investors would be wise to consider such effects, we would always point to the long-term when considering investing in funds.

Below we highlight some sector offerings that we rate positively at Morningstar, which have demonstrated an ability to outperform peers over the long-term.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rathbone Income R Acc1,644.30 GBP-2.29Rating
Royal London UK Equity Income A727.52 GBP-2.07Rating
Trojan Income O Acc364.36 GBP-0.87Rating

About Author

Peter Brunt  is a Senior Fund Analyst for Morningstar UK