UK Equity Income

Equity income strategies focus on those companies that pay a dividend to shareholders. Companies that prioritise dividend payouts tend to be more established and stable companies, with steady profits, and therefore an equity income strategy will often prove more defensive in falling markets, though may lag a rapidly rising market. Dividends reinvested over time can have a powerful compounding effect. 
In general UK equity income fund managers are striving to find those companies where the dividend is high, stable and secure, and blend them in a portfolio. They will seek to avoid those companies where a dividend cut is likely, as this will depress the share price. Some strategies will put particular emphasis on those companies paying a growing dividend; others will seek a high absolute dividend. There are also smaller companies income strategies, which allow investors to balance income with capital growth. 
Equity income investing is thought to bring its own valuation discipline. The income yield on any stock is expressed as a percentage of the share price. If the share price rises, that income falls and therefore income investors are unlikely to buy companies that are very expensive because the income would be low. 

Introduction to UK Equity Income

Equity income strategies focus on those companies that pay a dividend to shareholders. Companies that prioritise dividend payouts tend to be more established and stable companies, with steady profits, and therefore an equity income strategy will often prove more defensive in falling markets, though may lag a rapidly rising market. Dividends reinvested over time can have a powerful compounding effect. 

In general UK equity income fund managers are striving to find those companies where the dividend is high, stable and secure, and blend them in a portfolio. They will seek to avoid those companies where a dividend cut is likely, as this will depress the share price. Some strategies will put particular emphasis on those companies paying a growing dividend; others will seek a high absolute dividend. There are also smaller companies income strategies, which allow investors to balance income with capital growth. 

Equity income investing is thought to bring its own valuation discipline. The income yield on any stock is expressed as a percentage of the share price. If the share price rises, that income falls and therefore income investors are unlikely to buy companies that are very expensive because the income would be low.

Equity income strategies focus on those companies that pay a dividend to shareholders. Companies that prioritise dividend payouts tend to be more established and stable companies, with steady profits, and therefore an equity income strategy will often prove more defensive in falling markets, though may lag a rapidly rising market. Dividends reinvested over time can have a powerful compounding effect. In general UK equity income fund managers are striving to find those companies where the dividend is high, stable and secure, and blend them in a portfolio. They will seek to avoid those companies where a dividend cut is likely, as this will depress the share price. Some strategies will put particular emphasis on those companies paying a growing dividend; others will seek a high absolute dividend. There are also smaller companies income strategies, which allow investors to balance income with capital growth. Equity income investing is thought to bring its own valuation discipline. The income yield on any stock is expressed as a percentage of the share price. If the share price rises, that income falls and therefore income investors are unlikely to buy companies that are very expensive because the income would be low. 

The tax treatment of investments is subject to tax law and HMRC practice which are subject to change.

OEICs and Unit Trusts

Name1 Year (%)3 Years (%)5 Years (%)Fund Size (M)Yield (%)
AXA Framlington Blue Chip Equity Income Z Acc20.2126.6382.84100.774.03Buy
AXA Framlington Monthly Income Z Acc22.8730.5498.85260.694.37Buy
Aberdeen UK Equity Income I Acc27.8115.8666.64184.403.50Buy
Artemis Income I Acc22.0827.8885.826,545.883.81Buy
Aviva Inv UK Equity Income 2 Acc21.6529.1190.49956.673.63Buy
Barclays UK Equity Income R Acc GBP19.7425.4885.40161.403.90Buy
Barclays UK Equity Income S2 R Acc GBP19.6825.1985.16185.404.30Buy
BlackRock UK Income D Acc21.9936.7182.77400.443.91Buy
CF Canlife UK Equity Income C Acc GBP17.2227.9574.32186.003.45Buy
CF Miton UK Multi Cap Income B Inst Acc15.4936.52143.28873.723.86Buy
CF Woodford Equity Income C Acc GBP16.42--10,131.862.92Buy
F&C Responsible UK Income 2 Acc15.3829.1386.75322.103.30Buy
F&C UK Equity Income 2 Acc24.0927.3168.9062.723.10Buy
FP Miton Income B Acc18.1732.1883.93201.524.00Buy
Fidelity Enhanced Income Y Acc14.9920.0963.27568.006.19Buy
Fidelity Enhanced Income W Acc15.1920.7259.83568.006.14Buy
Franklin UK Equity Income W Acc25.4135.2399.14383.493.65Buy
HC Charteris Premium Income Inst Acc26.3618.8737.5311.501.39Buy
HL Multi Manager Income & Growth A Acc19.1427.9787.473,150.533.92Buy
HSBC Income C Acc18.7318.1063.23210.103.53Buy

OEICs and Unit Trusts

Name1 Year (%)3 Years (%)5 Years (%)Fund Size (M)Yield (%)
AXA Framlington Blue Chip Equity Income Z Inc20.4326.6074.02100.774.07Buy
AXA Framlington Monthly Income Z Inc22.9530.6798.86260.694.51Buy
Aberdeen UK Equity Income I Inc27.8115.9066.65184.403.50Buy
Allianz UK Equity Income C Inc21.3017.5373.6868.974.14Buy
Artemis Income I Inc22.0927.9085.876,545.883.92Buy
Aviva Inv UK Equity Income 221.6629.1190.43956.673.75Buy
Barclays UK Equity Income R Dis GBP19.7625.4585.54161.404.10Buy
Barclays UK Equity Income S2 R Dis GBP19.7124.9784.80185.404.30Buy
BlackRock UK Income D Inc22.0436.8082.83400.443.91Buy
CF Canlife UK Equity Income C Inc GBP17.2228.7275.25186.003.54Buy
CF Miton UK Multi Cap Income B Inst Inc15.4936.52143.09873.723.97Buy
CF Woodford Equity Income C Inc GBP16.36--10,131.862.98Buy
Castlefield B.E.S.T Income Inst Inc11.5118.5567.9926.654.01Buy
Castlefield B.E.S.T Income Charity Inc11.5118.5568.2726.654.01Buy
Close OLIM UK Equity Income Inc21.4526.8187.3312.913.97Buy
F&C Responsible UK Income 2 Inc15.3429.1286.59322.103.70Buy
F&C UK Equity Income 2 Inc23.8426.0665.1962.723.70Buy
FP Miton Income B Inc18.1632.1784.02201.524.20Buy
Fidelity Enhanced Income W Inc15.1920.7259.75568.006.49Buy
Fidelity Enhanced Income Y Inc11.1916.1953.44568.006.54Buy

Investment Trusts

Name1 Year (%)3 Years (%)5 Years (%)DiscountNAV
Blackrock Income And Growth Investment Trust Plc Ord 1P21.2934.1196.15-2.61208.95Buy
British & American IT PLC Ord9.1230.33103.6146.3864.90Buy
Chelverton Small Companies Dividend Trust plc Ordinary Shares37.0149.40242.89-2.06255.26Buy
Chelverton Small Companies Dividend Trust plc Zero Dividend Preference Shares5.8416.24---Buy
Dunedin Income Growth Investment Trust PLC Ord 25p33.5811.1661.22-9.47292.73Buy
Edinburgh Investment Tst plc14.7439.5794.37-5.47795.53Buy
F&C Capital & Income IT PLC Ord29.5632.8783.88-0.02316.55Buy
Finsbury Growth & Income Trust PLC27.2050.72144.770.89714.63Buy
Invesco Income Growth Trust plc20.5219.6376.30-11.80340.15Buy
JP Morgan Elect Managed Income20.7926.5984.509.33102.21Buy
JP Morgan Income & Capital Trust plc Ord27.8717.73136.02-11.03103.13Buy
JP Morgan Income & Capital Trust plc Package Units18.5214.1579.06-5.48388.79Buy
JP Morgan Income & Capital Trust plc ZDP5.1911.9443.952.72182.53Buy
JP Morgan Claverhouse IT plc30.9325.69113.57-7.66732.35Buy
Lowland Investment Company Ord29.9219.75106.24-4.281,620.30Buy
Merchants Trust PLC31.9814.1180.54-3.87508.45Buy
Miton The Investment Company Ord-0.58-1.3286.92-4.53362.42Buy
Murray Income Trust PLC Ord 25p31.1916.9364.21-8.11877.17Buy
Perpetual Income and Growth Investment Trust plc11.8918.8588.24-8.21434.71Buy
Schroder Income Growth27.9321.4797.38-8.23315.34Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
DB X-Trackers FTSE 100 Short Daily UCITS ETF GBP-11.55-23.69-24.57-47.62GBPEquity - UKBuy
ETFS FTSE 100 Leveraged (Daily 2x) GO UCITS ETF GBP23.2755.7526.13123.33GBPEquity - UKBuy
ETFS FTSE 100 Super Short Strategy (Daily 2x) GO UCITS ETF GBP-21.57-42.03-46.14-76.31GBPEquity - UKBuy
First Trust United Kingdom AlphaDEX UCITS ETF A Acc GBP12.9313.7624.08-GBPEquity - UKBuy
Lyxor UCITS ETF FTSE 250 GBP12.9420.6137.64112.79GBPEquity - UKBuy
Lyxor UCITS ETF FTSE 100 C GBP12.0127.7221.6669.50GBPEquity - UKBuy
Lyxor UCITS ETF FTSE All Share GBP12.1726.2123.5974.55GBPEquity - UKBuy
Ossiam FTSE 100 Minimum Variance UCITS ETF 1C GBP12.4014.1822.0875.42GBPEquity - UKBuy
SPDR S&P UK Dividend Aristocrats UCITS ETF12.7720.2614.1869.04GBPEquity - UKBuy
Source FTSE 10012.5628.1121.3268.43GBPEquity - UKBuy
Source FTSE 25013.3221.0138.06113.19GBPEquity - UKBuy
iShares FTSE 100 UCITS ETF Acc12.5128.2722.1169.51GBPEquity - UKBuy
iShares FTSE 250 UCITS ETF GBP13.6121.2938.10112.80GBPEquity - UKBuy
iShares MSCI UK Small Cap UCITS ETF12.8319.8439.44117.74GBPEquity - UKBuy
iShares MSCI UK UCITS ETF12.0927.5219.5865.72GBPEquity - UKBuy

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