Solid returns attract investors to Equity Income

Top and bottom funds differentiated by weighting in mega caps, with best performers holding more in mid- and small-cap companies

UK investors have flocked to the Equity Income sector in recent years as average returns have typically been higher than UK All Companies counterparts with the added comfort of a regular income. As expected, managers in the peer group have tended to favour value stocks over the past five to six years, which have outperformed growth holdings during that period. Equity Income funds have also largely had a bias towards well-established companies with high cashflows that can pay shareholder dividends. Bestinvest director Justin Modray said many Equity Income funds hold more cautious companie...