Lagging income funds struggle as defensive stocks fail to take off

Can struggling equity income funds find momentum to turn around performance?

In theory, the current environment should suit the defensive, high-yielding stocks that populate the portfolio of the average equity income fund. Economic growth is anaemic, and with interest rates at an all-time low, income is at a premium. But it has been a long time since dividend-paying companies have performed and, as a result, the Equity Income peer group continues to lag. Are there any signs of renewed momentum for the sector? In 2010, the average equity income fund returned 14.6%, compared to 17.5% for the UK All Companies sector. Over five years, the sector is 4.7% behind. The r...