Threadneedle's Colwell: Our top themes during five volatile years

Richard Colwell, manager of the Threadneedle UK Equity Income fund, discusses the current state of the UK market and the outlook for the next 12 months.

What themes have contributed to the fund’s outperformance during the past five volatile years for markets? We reduced positions in financials prior to the financial crisis and, whereas market dividends fell around one-third from pre- financial crisis peak to trough, UK Equity Income fund dividends were only cut by around 17%. Our quality bias meant we lagged the market/peer group in early 2009. More recently, however, we bought into quality/more resilient stocks in Q4 2010/H1 2011 at cheap valuations when the rest of the market was rallying on QE2. As the defensive theme became more ma...