Artemis's Frost: Equity income is back in favour

Equity income funds are returning to favour as investors look to generate cashflow within fluctuating bull and bear markets, writes Adrian Frost of Artemis.

Will it go on? Interest rates, and therefore returns to savers with bank deposits, are at their lowest for 326 years. And yet a recent poll of economists predicted just one 25 basis points rise in the fourth quarter this year, followed by similar modest rises in 2011. Even that, as recovery remains fragile, could prove optimistic. So it will be a long time before savers get the sort of rates on deposit they used to expect. That is one reason for the popularity of equity income funds: a high yield, and the reasonable expectation of capital growth to boot. A second reason is simple demogra...