Ten income funds that beat the market last year

Income investors enjoyed a bumper year in 2011 as dividends from UK-listed companies hit an all-time high, surging 12.8% to £67.8bn.

Funds in the UK Equity Income sector managed to take advantage of this stellar dividend growth, with yields increasing on average by 11.3% in 2011, according to Morningstar. However, a number of funds were ahead of the rest in growing their yields last year, albeit from a low base for some in 2010. Some benefitted from larger positions in the UK's biggest dividend payers, while others received a boost from exposure to less obvious names. Top of the pile is the Unicorn UK Income fund, run by John McClure, who has raised the fund's yield by 59% over the past year, despite not having any...