Industry welcomes 'sensible' UK Equity Income changes but cautions against 'bad decisions'

Yield lowered from 110% to 100% of FTSE All-Share

Fund pickers are broadly sanguine on the Investment Association's (IA) decision to lower the UK Equity Income sector's yield hurdle from 110% to 100% of the FTSE All-Share index, but some argued a relaxation of the rules could lead managers to make "bad decisions".

The IA announced its decision to lower the yield hurdle earlier today following a consultation period which begun last April. The body also said a failure to achieve 90% of the index yield in any one year rolling period will result in a fund being removed from the sector. Previously, the IA's sector definition said: "Funds that fail to meet the 110% average yield for each three year rolling period will be removed from the sector." This resulted in many high-profile funds being moved to the UK All Companies sector including the Invesco Perpetual High Income and Income funds, Rathbone Inco...