Natural mining aversion hits income returns

UK Equity Income managers struggle in early 2008, although yield easier to come by outside resources sector

UK income managers are no longer struggling to find yield but have suffered badly this year from a natural aversion to runaway mining stocks. Over the first four months of 2008, the median UK equity income fund dropped 7.1% against a 4.1% decline from the FTSE All-Share. Standard & Poor's analyst Alison Cratchley said the clear reason for these returns is the continued underperformance of high-yielding stocks relative to their low-yielding counterparts. "This reflected the poor performance of traditional income-producing areas such as banks, which were hurt by the US sub-prime mortgag...