Not All Equity Income Funds are Created Equal

Investors seeking income should first familiarise themselves with the type of equity income funds available on the market

Fidelity International 9 September, 2013 | 1:18PM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Michael Clark, portfolio manager of the Fidelity MoneyBuilder Dividend and Fidelity Enhanced Income funds says income seekers should do their homework before investing

Many investors will be familiar with the attractions of the equity income sector and the compounding effects of dividends. Indeed, one only needs to look at how dividends have accounted for two thirds of long-term total returns. Moreover, as well as providing the potential to enhance returns or to provide an income stream, dividend stocks typically provide a lower-risk way to access the equity market.

With an array of attractive features, it therefore comes as a little surprise that equity income funds are increasingly being viewed as a core holding throughout the cycle for many investors’ portfolios. Testament to this how the UK Equity Income sector has been steadily growing in popularity for over 10 years now, with assets having grown by over 219% in the last decade.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Fidelity International

Fidelity International  

is a global leader in asset management, providing investment products and services to individuals and institutions in the UK, continental Europe, the Middle East and Asia Pacific.