RWC's Lance calls for cap on largest income funds

The largest equity income funds should be capped to protect investors from concentration risk, according to RWC Partners' Ian Lance.

Speaking at the Investment Week Global Income Focus 2011 conference, the co-manager of the RWC income portfolios said yield requirements are forcing the largest funds into a narrow selection of stocks, putting them at risk of blow-outs similar to BP’s recent sell-off. “The equity income sector is £54bn in size and over half the assets are managed by four funds,” he said. “Yield restrictions force exposure to big dividend payers and creates commonality between the funds.” The figures make worrying reading, especially with regards to the FTSE All Share index. To be included in the IM...