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>> ROBIN HEPWORTH: Hello, my name is Robin Hepworth and I am the Chief Investment Officer
at Ecclesiastical.
[pause]
My main responsibilities include managing the Higher Income Fund and the International
Fund. However, I also have group wide responsibility for the implementation and formulation of
investment strategy.
[pause]
I have been with Ecclesiastical for 24 years now so largely man and boy and over that time
I have seen the culture of the organisation really develop into far more of a team based
approach which makes working at Ecclesiastical so much more enjoyable.
[pause]
The Higher Income Fund has demonstrated consistent and strong performance since its launch in
1994. Indeed, in 14 of the last 15 years the Fund has outperformed its sector average,
delivering a return over that period of some 276% compared to the sector average of just
113%.
[pause]
I think one of the main reasons for the success of the Higher Income Fund has been our investment
philosophy. Our investment philosophy is very much based on a value-based stock picking
approach. We also think it is important to employ a contrarian approach to asset allocation
and to have long-term investment time horizons. Thereby keeping our costs low.
The final part of our investment philosophy is a very strong emphasis on diversification,
thereby keeping the volatility of the Fund at acceptable levels.
[pause]
The Fund delivers capital growth through a combination of successful stock picking and
good asset allocation. Asset allocation is key, timing the switches between equities,
bonds and cash.
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We do not use asset allocation models, believing these often provide a bogus rationality for
investment decision making. We prefer to give our Fund Managers the discretion to adapt
their portfolios to best match the state of the economy and the level of the financial
markets.
[pause]
My investment philosophy is to invest for the long-term with low levels of turnover
thereby keeping our costs down. I also think it's important to have a contrarian approach
to asset allocation. And finally, I think it's important to have a strong emphasis
on diversification.
[pause]
I have a positive outlook for the income sector. We are expecting economic growth to be low
and interest rates to remain low. Under that scenario those funds that can demonstrate
good, long-term track records and high levels of yield plus dividend growth, we think will
continue to attract interest.
[pause]
Ecclesiastical Investment Management is part of the Ecclesiastical Insurance Group, an
insurance company that has been around for 125 years with an A- credit rating from Standard
& Poors. Ecclesiastical Investment Management has assets under management of £1.8 billion.
[pause]
The team I work with include Sue Round, Andrew Jackson and Chris Hiorns. We have an average
tenure of over 18 years and I think this is one of the keys for our success. We have a
great team environment for discussing new ideas and exchanging information and that
encourages a long-term investment approach.
[pause]
The Higher Income Fund is a highly diverse investment portfolio and is not immune to
falls in the wider financial markets. However, it's defensive positioning has meant that
the falls in financial markets in 2008 were a lot less severe in the Higher Income Fund
and indeed, we are now in a position where we are again showing strong positive total
returns since the onset of the financial crisis.
[pause]
For more information on the Higher Income Fund please get in touch.
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