But a call from a former colleague persuaded him to renew his acquaintance with the unit trust business. “I have been a fund manager since 1969, mostly in unit trusts, and principally with M&G and Framlington. As you get older, you tend to move into private client fund management, which is what I did four years ago. I joined Taylor Young Investment Management.
“I had been with them two years when my ex-chief at Framlington, the late Tim Miller, who was running Portfolio Fund Managers, said he wasn’t happy with how its high-income portfolio was being run.” Mr Cornes took over the Portfolio High Income Fund.”It was reconstructed on 31 May 2000. The Portfolio High Income Fund had been a fund of funds invested 60 per cent in bonds and 40 per cent in equities, paying a monthly income of about 6 per cent and aiming for a high and slowly rising income, with some long-term capital growth. The new Monthly Income Fund has the same aims but, as a securities fund, invests directly in the underlying securities.”Its predecessor was yielding 4.2 per cent net, the equivalent of 5.2 per cent gross, and maintaining that level when gilts are yielding 5.2 per cent down to about 4.5 per cent at the long end of the market is tough.The idea of a fund that makes monthly distributions is attractive, especially if you are living off investment income. If you were used to a monthly salary cheque, getting only one or two cheques a year can be difficult.”With the Portfolio Monthly Income Fund you cannot pay income out of capital returns, only from income distributions.”Another restraining factor is the fund’s requirement to have at least 60 per cent of its portfolio in fixed-interest securities.

With the gradual removal of advance corporation tax on equity dividends, Pep and Isa investors will get the full benefit from their tax rebates only from this kind of portfolio.The high proportion of bonds has also enabled Mr Cornes to ensure consistency in monthly income distributions. “I went to the eurosterling market because there is no currency risk and you can buy bonds below par and still get yields of up to 5.8 or 5.9 per cent, investing in AAA- and AA-rated companies. Since I am buying below par, if I hold these bonds to maturity I also get capital appreciation. And interest rates have been coming down so the fixed interest side of the portfolio has shown a capital return, while also providing the bulk of the income for monthly distribution.”Finding the right holdings for the equity element of the portfolio is not always so easy. “I have tried to invest in high-yielding companies that are going to maintain, or even increase, their dividends. So far, I have been lucky and in no cases have dividends been cut.”The equity portfolio has its main focus on construction and property-related companies, with the four largest holdings being Beazer Group, Persimmon, George Wimpey (all yielding 3.7 to 4.2 per cent) and Haslemere, offering 9.8 per cent.”We have been able to generate capital performance while maintaining the dividend payout,” says Mr Cornes. “Having no technology in the portfolio has helped.”   Fund manager: John CornesAge: 56Fund: Portfolio Monthly IncomeSize of fund: £14.70mFund relaunched: May 2000Manager of fund: Since relaunchCurrent yield: 5.38%Initial charge: 5.00%Annual charge: 1.50%Current bid/offer spread: 5.00%Minimum investment: £5,000 (subsequently £1,000)Minimum monthly savings: n/aStandard & Poor’s rating (maximum *****): n/a(minimum three-year track record required)Fund performance to 2 April 2001 (offer-to-bid, with net income reinvested):Since relaunch 5.79% Source: Standard & Poor’s.

At times, it pays to be nimble-footed. Although the no pain, no gain portfolio is geared for the long haul, and so I am reluctant to chop and change, I am pleased I scented possible problems at Hartford, the fledgling restaurant group

At times,, it pays to be nimble-footed. Although the no pain, no gain portfolio is geared for the long haul, and so I am reluctant to chop and change, I am pleased I scented possible problems at Hartford, the fledgling restaurant group.
One of the portfolio’s first recruits was an aspiring restaurant business called Montana. Its particular recipe, up-market American eateries, was enjoying considerable success in the London area and an ambitious rollout was on the menu.Then came a merger with AIM-traded Hartford, owner of the much-hyped Pharmacy restaurant in Notting Hill, west London. It seemed an ideal blend ­ the Notting Hill eatery, with its star-studded backers, and Kevin Finch, the man behind Montana, as chief executive of the enlarged group.