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 Acc16.6623.8265.5899.534.03Buy
AXA Framlington Monthly Income Z Acc18.2128.2286.11252.134.37Buy
Aberdeen UK Equity Income I Acc21.2015.8053.99180.903.50Buy
Artemis Income I Acc17.1527.0172.666,506.693.84Buy
Aviva Inv UK Equity Income 2 Acc16.1326.9776.71940.003.71Buy
Barclays UK Equity Income R Acc GBP15.9024.1073.00161.403.90Buy
Barclays UK Equity Income S2 R Acc GBP16.0323.8172.84185.404.30Buy
BlackRock UK Income D Acc17.3435.5567.09383.653.86Buy
CF Canlife UK Equity Income C Acc GBP13.6225.9161.05185.393.51Buy
CF Miton UK Multi Cap Income B Inst Acc13.1132.50130.12829.213.95Buy
CF Woodford Equity Income C Acc GBP12.86--10,051.373.15Buy
F&C Responsible UK Income 2 Acc11.5626.5373.38314.753.40Buy
F&C UK Equity Income 2 Acc18.8625.9855.0162.033.20Buy
FP Miton Income B Acc13.4331.0571.60197.354.10Buy
Fidelity Enhanced Income Y Acc10.9819.3154.46551.006.34Buy
Fidelity Enhanced Income W Acc11.0919.9751.11551.006.29Buy
Franklin UK Equity Income W Acc19.4334.2682.47373.883.77Buy
HC Charteris Premium Income Inst Acc19.3217.8724.5411.501.39Buy
HL Multi Manager Income & Growth A Acc15.5527.2278.173,116.323.92Buy
HSBC Income C Acc14.1615.9349.63205.343.64Buy

OEICs and Unit Trusts

Name1 Year (%)3 Years (%)5 Years (%)Fund Size (M)Yield (%)
AXA Framlington Blue Chip Equity Income Z Inc16.8223.8657.6199.534.07Buy
AXA Framlington Monthly Income Z Inc18.2628.2986.19252.134.51Buy
Aberdeen UK Equity Income I Inc21.2015.8554.00180.903.50Buy
Allianz UK Equity Income C Inc15.7115.9761.7467.494.23Buy
Artemis Income I Inc17.1527.0372.716,506.693.97Buy
Aviva Inv UK Equity Income 216.1226.9676.65940.003.83Buy
Barclays UK Equity Income R Dis GBP15.8924.0473.10161.404.10Buy
Barclays UK Equity Income S2 R Dis GBP15.9923.6272.48185.404.30Buy
BlackRock UK Income D Inc17.4335.6267.19383.653.87Buy
CF Canlife UK Equity Income C Inc GBP13.6226.6861.90185.393.61Buy
CF Miton UK Multi Cap Income B Inst Inc13.1132.50129.94829.214.05Buy
CF Woodford Equity Income C Inc GBP12.79--10,051.373.24Buy
Castlefield B.E.S.T Income Inst Inc7.9017.9156.1425.934.11Buy
Castlefield B.E.S.T Income Charity Inc7.9117.9256.4225.934.11Buy
Close OLIM UK Equity Income Inc16.0623.3572.2412.614.10Buy
F&C Responsible UK Income 2 Inc11.5526.4873.27314.753.80Buy
F&C UK Equity Income 2 Inc18.5824.8251.6562.033.70Buy
FP Miton Income B Inc13.4431.0671.70197.354.30Buy
Fidelity Enhanced Income W Inc11.0919.9251.07551.006.65Buy
Fidelity Enhanced Income Y Inc7.2515.3045.00551.006.71Buy

Investment Trusts

Name1 Year (%)3 Years (%)5 Years (%)DiscountNAV
Blackrock Income And Growth Investment Trust Plc Ord 1P16.0133.3780.57-2.87203.86Buy
British & American IT PLC Ord3.2416.6271.4623.2764.90Buy
Chelverton Small Companies Dividend Trust plc Ordinary Shares26.2742.68200.39-6.60245.73Buy
Chelverton Small Companies Dividend Trust plc Zero Dividend Preference Shares6.6716.24---Buy
Dunedin Income Growth Investment Trust PLC Ord 25p21.898.1948.71-10.18288.08Buy
Edinburgh Investment Tst plc12.8439.7083.25-2.48769.04Buy
F&C Capital & Income IT PLC Ord19.2833.1870.710.16308.13Buy
Finsbury Growth & Income Trust PLC21.0348.94128.850.74696.85Buy
Invesco Income Growth Trust plc14.2920.1967.79-9.32326.16Buy
JP Morgan Elect Managed Income17.5124.2968.797.74102.10Buy
JP Morgan Income & Capital Trust plc Ord22.4616.53108.33-9.74101.37Buy
JP Morgan Income & Capital Trust plc Package Units18.6814.8670.33-4.30384.53Buy
JP Morgan Income & Capital Trust plc ZDP5.3412.6140.063.14181.79Buy
JP Morgan Claverhouse IT plc27.3327.0297.60-5.14726.84Buy
Lowland Investment Company Ord17.8613.4294.73-5.911,595.30Buy
Merchants Trust PLC21.7110.7264.73-4.65496.84Buy
Miton The Investment Company Ord-7.03-2.5176.95-7.28358.60Buy
Murray Income Trust PLC Ord 25p23.4114.9052.94-7.43856.66Buy
Perpetual Income and Growth Investment Trust plc7.2815.9874.26-6.08415.66Buy
Schroder Income Growth20.2724.4080.52-6.58307.74Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
DB X-Trackers FTSE 100 Short Daily UCITS ETF GBP-7.10-19.04-24.52-41.54GBPEquity - UKBuy
ETFS FTSE 100 Leveraged (Daily 2x) GO UCITS ETF GBP11.4438.2626.0978.92GBPEquity - UKBuy
ETFS FTSE 100 Super Short Strategy (Daily 2x) GO UCITS ETF GBP-13.57-34.81-46.16-70.64GBPEquity - UKBuy
First Trust United Kingdom AlphaDEX UCITS ETF A Acc GBP9.4611.9021.63-GBPEquity - UKBuy
Lyxor UCITS ETF FTSE 250 GBP11.9318.4732.2894.15GBPEquity - UKBuy
Lyxor UCITS ETF FTSE 100 C GBP6.5420.3821.6851.76GBPEquity - UKBuy
Lyxor UCITS ETF FTSE All Share GBP7.4919.8922.8656.90GBPEquity - UKBuy
Ossiam FTSE 100 Minimum Variance UCITS ETF 1C GBP4.159.5222.7763.48GBPEquity - UKBuy
SPDR S&P UK Dividend Aristocrats UCITS ETF6.0813.809.6254.87GBPEquity - UKBuy
Source FTSE 1006.3919.9820.5649.87GBPEquity - UKBuy
Source FTSE 25011.9218.4532.2493.88GBPEquity - UKBuy
iShares FTSE 100 UCITS ETF Acc6.5420.3521.5751.11GBPEquity - UKBuy
iShares FTSE 250 UCITS ETF GBP11.9118.3931.9193.01GBPEquity - UKBuy
iShares MSCI UK Large Cap UCITS ETF5.4621.2218.3042.44GBPEquity - UKBuy
iShares MSCI UK Small Cap UCITS ETF11.4218.3833.0796.81GBPEquity - UKBuy
iShares MSCI UK UCITS ETF6.5520.0819.6847.78GBPEquity - UKBuy

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