Keeping the faith:finding long-term value inthe UK equity income market

Though the immediate future of UK equity income looks to be a challenge, investors should not lose sight of longer-term opportunities. In the meantime, selectivity is paramount

One of the key challenges income investors have faced so far in 2008 has been the blowing up of certain financial names which, due to their high running yields, have traditionally been well-represented in the typical UK equity income fund. This has been coupled with a strong performance from mining shares, which are significantly under-represented in income funds, due to a corresponding lack of dividend yield. A number of income fund managers have been suggesting that mining is a bubble about to burst. But China's fast-paced and highly resource-intensive economic growth is an important fa...