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IA relaxes yield target for UK Equity Income sector

The IA has cut the yield target funds have to meet to be included in the UK Equity Income and Global Income sectors

The number of funds in the UK Equity Income sector could grow following the Investment Association (IA)'s decision to relax its stringent yield requirements.

The IA is lowering the yield hurdle funds have to meet to be included in the UK Equity Income sector from 110 per cent to 100 per cent of the FTSE All-Share's yield over a three-year rolling period, following controversy over the number of income funds exiled from the sector. But failure to achieve 90 per cent of the FTSE All-Share's yield in any one-year period will still result in a fund being removed from the sector.

To be included in the Global Equity Income sector, meanwhile, funds will now have a yield target of 100 per cent of the MSCI World index over a rolling three-year period.

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