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 Acc8.2126.5656.0691.853.94Buy
AXA Framlington Monthly Income Z Acc17.5636.7390.06284.554.15Buy
Aberdeen UK Equity Income I Acc8.3920.6340.01167.203.90Buy
Artemis Income I Acc13.5931.6866.256,245.273.73Buy
Aviva Inv UK Equity Income 2 Acc12.9033.7168.34947.413.97Buy
Barclays UK Equity Income (Series 2) R Acc GBP12.4827.7465.24185.804.30Buy
Barclays UK Equity Income R Acc GBP12.4127.8064.90158.503.90Buy
BlackRock UK Income D Acc10.5533.3960.35411.333.96Buy
CF Canlife UK Equity Income C Acc GBP8.2528.1054.13207.663.67Buy
CF Livingbridge UK Multi Cap Income C Acc---6.67-Buy
CF Miton UK Multi Cap Income B Inst Acc16.7241.86113.65998.683.92Buy
CF Woodford Equity Income C Acc GBP1.1021.84-8,106.743.58Buy
F&C Responsible UK Income 2 Acc13.8933.1767.54327.353.10Buy
F&C UK Equity Income 2 Acc10.6132.5149.3759.883.10Buy
FP Miton Income B Acc10.2433.8264.25183.034.41Buy
Fidelity Enhanced Income Y Acc5.5815.4837.14543.006.52Buy
Fidelity Enhanced Income W Acc5.7616.0338.45543.006.46Buy
Franklin UK Equity Income W Acc12.3737.6474.96510.144.19Buy
HC Charteris Premium Income Inst Acc11.0330.8123.4611.503.50Buy
HL Multi Manager Income & Growth A Acc10.8728.0869.533,183.613.96Buy

OEICs and Unit Trusts

Name1 Year (%)3 Years (%)5 Years (%)Fund Size (M)Yield (%)
AXA Framlington Blue Chip Equity Income Z Inc8.1626.5656.0291.854.13Buy
AXA Framlington Monthly Income Z Inc17.5236.7789.99284.554.22Buy
Aberdeen UK Equity Income I Inc8.3820.6140.03167.203.90Buy
Allianz UK Equity Income C Inc14.6230.0955.3968.804.02Buy
Artemis Income I Inc13.6131.7066.276,245.273.84Buy
Aviva Inv UK Equity Income 212.9033.7268.34947.414.09Buy
Barclays UK Equity Income (Series 2) R Dis GBP12.4627.7664.88185.804.30Buy
Barclays UK Equity Income R Dis GBP12.4227.7565.03158.504.10Buy
BlackRock UK Income D Inc10.5433.3960.47411.333.99Buy
CF Canlife UK Equity Income C Inc GBP8.2628.1154.95207.663.78Buy
CF Livingbridge UK Multi Cap Income C Inc---6.67-Buy
CF Miton UK Multi Cap Income B Inst Inc16.7341.86113.58998.684.03Buy
CF Woodford Equity Income C Inc GBP1.0921.78-8,106.743.66Buy
Castlefield B.E.S.T Income Inst Inc7.4720.1547.0526.343.60Buy
Castlefield B.E.S.T Income Charity Inc7.4918.6745.2326.343.70Buy
F&C Responsible UK Income 2 Inc13.8833.1667.57327.353.80Buy
F&C UK Equity Income 2 Inc10.3431.4446.4259.883.60Buy
FP Miton Income B Inc10.2433.8564.34183.034.58Buy
Fidelity Enhanced Income W Inc5.7916.1338.53543.007.26Buy
Fidelity Enhanced Income Y Inc5.5415.4537.12543.007.32Buy

Investment Trusts

Name1 Year (%)3 Years (%)5 Years (%)DiscountNAV
Blackrock Income And Growth Investment Trust Plc Ord 1P12.7431.0469.77-3.14210.10Buy
British & American IT PLC Ord-18.046.1938.8328.1152.30Buy
Chelverton Small Companies Dividend Trust plc Ordinary Shares27.0181.92214.08-1.65257.75Buy
Chelverton Small Companies Dividend Trust plc Zero Dividend Preference Shares3.5310.9631.062.34136.07Buy
Dunedin Income Growth Investment Trust PLC Ord 25p11.0117.0536.58-10.43287.21Buy
Edinburgh Investment Tst plc3.3021.3562.61-8.32756.95Buy
F&C Capital & Income IT PLC Ord17.7344.8370.400.26323.41Buy
Finsbury Growth & Income Trust PLC22.9755.75117.390.25762.12Buy
Invesco Income Growth Trust plc10.8717.4549.91-11.14324.67Buy
JP Morgan Elect Managed Income Shs 0.001P13.8225.9065.98-2.45116.10Buy
JP Morgan Income & Capital Trust plc Ord33.4933.42104.11-4.47101.80Buy
JP Morgan Income & Capital Trust plc Package Units19.3622.8064.91-3.46393.10Buy
JP Morgan Income & Capital Trust plc ZDP1.6110.6130.23-0.26189.50Buy
JP Morgan Claverhouse IT plc19.6332.1690.35-6.15752.30Buy
Lowland Investment Company Ord10.8531.6874.32-7.471,622.70Buy
Merchants Trust PLC15.0323.7360.89-6.55515.52Buy
Miton The Investment Company Ord7.991.2476.98-8.78364.51Buy
Murray Income Trust PLC Ord 25p12.4817.5842.16-9.45851.48Buy
Perpetual Income and Growth Investment Trust plc9.098.0254.86-9.12411.09Buy
Schroder Income Growth13.8325.4065.26-8.63315.34Buy

ETFs

Name6 Months (%)1 Year (%)3 Years (%)5 Years (%)CurrencySector
Amundi FTSE 100 UCITS ETF C GBP1.8511.7832.2950.36GBPEquity - UKBuy
BMO Enhanced Income UK Equity UCITS ETF----GBPEquity - UKBuy
BMO MSCI UK Income Leaders-2.7211.93--GBPEquity - UKBuy
DB X-Trackers FTSE 100 UCITS ETF (DR) - Income 1D GBP1.9711.9732.5450.60GBPEquity - UKBuy
DB X-Trackers FTSE 250 UCITS ETF (DR) 1D GBP1.6916.2139.6483.37GBPEquity - UKBuy
DB X-Trackers FTSE All Share UCITS ETF (DR) 1D GBP1.9312.7433.8255.54GBPEquity - UKBuy
DB X-Trackers FTSE 100 Equal Weight UCITS ETF (DR) 1D GBP-0.4412.30--GBPEquity - UKBuy
DB X-Trackers FTSE 100 Short Daily UCITS ETF GBP-2.54-12.10-31.12-41.32GBPEquity - UKBuy
DB X-Trackers FTSE 100 UCITS ETF (DR) 1C GBP1.9712.0633.1751.57GBPEquity - UKBuy
ETFS 3x Daily Short FTSE 100-8.26-32.71-72.22-GBXEquity - UKBuy
ETFS 3x Daily Long FTSE 1003.7434.4978.39-GBXEquity - UKBuy
ETFS FTSE 100 Leveraged (Daily 2x) GO UCITS ETF GBP2.3621.5952.8381.76GBPEquity - UKBuy
ETFS FTSE 100 Super Short Strategy (Daily 2x) GO UCITS ETF GBP-5.25-22.71-54.63-69.33GBPEquity - UKBuy
First Trust United Kingdom AlphaDEX UCITS ETF B Inc GBP1.4213.50--GBPEquity - UKBuy
First Trust United Kingdom AlphaDEX UCITS ETF A Acc GBP1.4213.5128.15-GBPEquity - UKBuy
HSBC FTSE 1001.9311.9832.5850.34GBPEquity - UKBuy
HSBC FTSE 2501.5616.0439.3782.84GBPEquity - UKBuy
Lyxor FTSE 100 UCITS ETF C GBP1.9812.0833.4452.05GBPEquity - UKBuy
Lyxor FTSE 100 UCITS ETF Monthly Hedged C USD2.2912.56--USDEquity - UKBuy
Lyxor UCITS ETF FTSE 250 GBP1.6216.1740.0084.22GBPEquity - UKBuy

Disclaimer

Interactive Investor does not endorse any particular product. If you are unsure about whether an investment is suitable for you please seek advice from a financial advisor.