Best and worst

COMPANIES cutting dividends on their shares have hurt the performance of many Personal Equity Plans that are invested in the income funds of split capital investment trusts.

At the bottom of the league table is the General Consolidated income fund, run by Moorgate Investment Management. Anthony Simonian, managing director, said the fund was invested to get the maximum amount of income. 'We have had holdings in shares that paid out above-average dividends,' he said, 'but these have been reduced greatly over the last two years - reductions of 10 per cent a year.'

Many of the companies that had to cut dividends also showed capital growth that was below average.

The fund is 50 per cent invested in FT-SE 100 companies and 50 per cent in smaller companies (less than pounds 320m market capitalisation).

The performance of Ivory & Sime's fund was also held back because of the cuts in dividends. Tom Maxwell, head of portfolio management, said that if investors want capital growth they should not invest in income- bearing shares of split capital investment trusts.

'These funds are for the retired who want to supplement their income in retirement,' he said.

The capital fund of the General Consolidated split capital fund has benefited from strong stock market performance last year.

Finsbury's two top performing funds were boosted by gearing of more than 20 per cent. Malcom King, senior fund manager, put the fund's success down to the company's simple investment style. 'We don't try to do anything very clever.'

The smaller companies fund is invested in shares such as Bluebird and Manders, while the growth fund is invested in bigger companies such as BP, BA and Cable & Wireless.