UK Equity Income

Schroders' Kevin Murphy and Nick Kirrage have moved their £1.1bn Income fund close to its maximum allowed overseas weighting to escape the "extreme" concentration seen in the UK market.

Rathbones' Income fund manager Carl Stick has ramped up the cash in his fund to its highest level for 10 years, warning the UK market is at risk of a correction.

Corporate profitability in the UK may have bounced back over the past two years but it is not likely to remain at high levels, according to RWC Partners' Nick Purves.

A third of UK Equity Income funds slashed distributions to investors in 2011, despite a bumper year for UK-listed companies which saw dividend payouts hit an all-time high of £67.8bn.

Poor results from companies such as Unilever, AstraZeneca and Shell last week showed the valuation gap between defensives and cyclicals is closing in a "vicious" fashion, according to JO Hambro Capital Management's James Lowen.

UK dividends are set to rise by 11% to £75bn this year, after reaching record highs in 2011.

JO Hambro Capital Management has removed the initial charge on its top performing UK Equity Income fund, managed by Clive Beagles and James Lowen, in a bid to raise up to £300m.

Invesco Perpetual's head of investment Neil Woodford said his favoured defensive blue chip names have recently delivered some confident trading updates, despite tough macroeconomic conditions.

Clive Beagles, manager of the £880m JOHCM UK Equity Income fund, has warned classically defensive stocks could be dangerous prospects for the next 12 to 18 months as fiscal austerity takes its toll on the UK economy.

Thomas Moore has been appointed co-manager of Standard Life Investments £107m Equity Income Trust alongside Karen Robertson, ahead of a move to make him lead manager next year.