Crossing the financial desert

With frequent announcements of dividend cuts by companies, it is easy to see why the UK Equity Income sector is losing popularity. But many funds in the sector are still paying attractive yields

As savings rates dry up and the stock markets continue to take a pounding, millions of savers and investors are looking to replace income they have lost. Overwhelmingly, they are turning to corporate bonds, with a record £1bn ploughed into the sector in January, according to the latest figures from the Investment Management Association. In the same month, the UK Equity Income sector saw a net inflow of just under £112m. It is not difficult to see why corporate bonds and not equity-income funds are the flavour of the month. Investment-grade bonds that were paying a pittance a couple of...