Skip to the content

How has Tineke Frikkee fared after three years at Smith & Williamson?

08 November 2016

Market experts have their say on Tineke Frikkee’s performance after slightly more than three years in charge of the Smith & Williamson UK Equity Income fund.

By Jonathan Jones,

Reporter, FE Trustnet

High weightings to unloved energy and commodity stocks have helped Tineke Frikkee outperform in her first three years as manager of the Smith & Williamson UK Equity Income, according to the experts. 

The £54m five FE Crown-rated fund, which she runs with Mark Swain, has beaten both the IA UK Equity Income sector and the FTSE All Share since Frikkee took over in June 2013.

The fund has been a top quartile performer since she became manager, returning 34.12 per cent to investors, 6.35 percentage points ahead of the sector and 9.71 percentage points over the benchmark, as the below graph shows.

Performance of fund vs sector and benchmark since manager start date

 

Source: FE Analytics

Smith & Williamson UK Equity Income has been a second quartile performer over one and three-year timeframes, but Chelsea Financial’s Darius McDermott says investors will be pleased with the start she has made.

“Second quartile over three years is not a bad result – it's been a steady performer and hasn't given investors any nasty surprises. She has also beaten the stock market in that time,” he said.

John Monaghan, senior investment research analyst at Square Mile, added: “Tineke is an experienced fund manager with a solid longer term track record so we are not overly surprised at the fund's three-year numbers outpacing both peers and the FTSE All Share.

Since taking over the fund, she has made a number of changes to the portfolio. The most obvious, according to Architas’ Adrian Lowcock, is the use of energy stocks to provide income.


He said: “The manager continues to use a similar process at this fund which she has used at her previous employer in targeting a high and growing income. 

“The fund has benefited from high weighting in energy stocks, particularly the oil majors which have rallied strongly from low levels at the start of the year.

 

Source: FE Analytics

As the above graph shows, Shell is the top holding in the fund, with BP among the top 10 as well.

Monaghan adds that many active managers in this sector have tended to position their portfolios away from index heavyweight areas in recent years (such as oil and other commodity-related companies and financials), which have performed either extremely well or poorly over the period.

Before joining Smith & Williamson, Frikkee was the manager of the £1.7bn Newton UK Income fund (called Newton Higher Income at the time), now run by FE Alpha Manager Christopher Metcalfe, for eight years.

Over her tenure, the fund made 20.32 per cent and swelled from £600m to £2.4bn.

The fund was managed with constraints that meant it could only invest in shares yielding at least 75 per cent of the FTSE All Share index yield. Shares had to be sold when a stock's yield fell below 50 per cent of the market level.

Newton relaxed these yield constraints at the start of 2015 to increase its investment universe.


Since Frikkee has taken over the Smith & Williamson UK Equity Income fund, the performance between the two funds has been comparable, with her new fund slightly outperforming her previous one over the period by 25 basis points, as the below graph shows.

Performance of funds since manager start date

 

Source: FE Analytics

And Chelsea Financials’ McDermott says the smaller fund has allowed her to change her investment approach and given Frikkee more flexibility than she had previously, resulting in a wider investment universe.

He said: “When she first arrived she changed the style from a barbell approach to one of dividend growth, focusing on companies with dividends that could outpace inflation, as well as adding some downside protection.

“She has the backing of Mark Swain, her co-manager, and strong team of analysts with good knowledge across all areas of the market cap scale. This has resulted in more mid-caps than many of her competitors, which has aided performance.

“It's a more nimble fund than the fund she ran at Newton and, I imagine, she is reasonably pleased with the results so far.”

Square Mile’s Monaghan added: “Since moving to S&W, Tineke has made some adjustments to the approach she used at Newton. For example, as the level of assets she is now responsible for are far lower than at Newton, she has greater flexibility to invest further down the market cap spectrum.

“She can also be more opportunistic when taking advantage of shorter term investment opportunities. We have also noted that the individual stock yield discipline previously employed is no longer as vehemently exercised.”

Editor's Picks

Loading...

Videos from BNY Mellon Investment Management

Loading...

Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.