Defensive qualities of equity income funds shone in 2008 but fared less well in 2009

Low quality cyclical rally proves a struggle for UK equity income funds

  Changes to sector The IMA has recently introduced two initiatives to help differentiate between funds that distribute regular dividend payments and funds in which the potential income is rolled up with the fund. By placing yield calculations on a uniform footing, the IMA has been able to use them to create three equity income fund sub-sectors. While entry to the mainstream UK Equity Income sector still requires a yield premium of at least 10% over the FTSE All Share index, a new sector, UK Equity Income & Growth, has been formed to house those funds on a yield of between 90% and 1...