Avoiding banks and property key for income funds

Managers agree recent performance has been down to avoiding bad sectors, particularly banks and property, rather than investing in the good ones

UK equity income managers broadly agree recent performance is down to avoiding the bad sectors rather than investing in the best ones. The general theme among funds at the top of the sector over the past three years has been to be underweight banks and property-related stocks. This has served them well as consumer-facing stocks continue to pour bad news out to the markets. Meanwhile, overweight positions in mining and oil companies have been beneficial to some top managers although many have had to barbell these stocks due to low yields. In general, a lack of mining holdings has led...