The UK has traditionally been the go-to area for equity income, with the home index offering one of the highest yields. Although this area has had problems over the past decade, there are still good opportunities for funds to home in on. Investment trusts also have the benefit of being able to hold back dividend income in good years, meaning they have reserves that enable them to maintain or even increase dividends in leaner years.
Not all the open-ended funds here are included in the IA UK Equity Income sector. This is because they do not meet its yield requirement of a historic yield on their distributable income in excess of 100 per cent of the FTSE All-Share’s yield at the fund’s year-end on a three-year rolling basis and 90 per cent on an annual basis. But they still have an income objective and, in many cases, provide an attractive and growing income.
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