But advisers must also be aware of funds that don’t hit their yield target. IMA data shows five funds were removed from the sector last year for not exceeding – on a three-year rolling period – 110 per cent of the yield of the market.
One of these – Henderson UK Equity Income – moved to the IMA UK All Companies sector in September and in November became the UK Equity Income & Growth fund, removing the requirement to provide income in excess of the yield of the FTSE All-Share index.
There remains a large amount of talent in the UK Equity Income space and asset flows could be choppy in coming months.
Advisers must make sure the fund they pick is well diversified and takes the commensurate amount of risk for the returns it gives.
Bradley Gerrard is news editor at Investment Adviser
