Which UK Equity Income Funds are Earning their Fee?

Investors should be aware of paying higher costs for active funds performing passively - we compare 10 top rated actively managed UK equity income funds to a passive fund 

Karen Kwok 27 January, 2016 | 4:34PM
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Interest rates have been at a record low for seven years, yet there is little sign of the tide turning. Bank of England Governor Mark Carney recently confirmed there was “no need for interest rates to rise”; meaning income seekers will have to continue to look for alternatives to cash.

Artemis Income and Schroder UK Alpha Income and the passive fund, iShares FTSE 100 ETF have half of their top holdings in common

Dividend paying stocks are one attractive option. According to the latest UK Dividend Monitor from Capital Asset Services, UK top 100 companies’ pay-outs rose 5.5% to £74 billion in 2015. In total, dividends paid by UK companies reached £88 billion in 2015. Predictions suggest UK equities will yield 4% on average in 2016, with the prospective 12 month yield on the large-cap index standing at 4%, and 2.9% for mid-caps.

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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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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Artemis Income R Inc2.26 GBP0.44Rating
AstraZeneca PLC8,996.00 GBP0.00Rating
British American Tobacco PLC2,600.00 GBP0.00Rating
BT Group PLC136.70 GBP0.00Rating
Fidelity MoneyBuilder Dividend237.60 GBP0.38Rating
Franklin UK Equity Income A Inc  
GlaxoSmithKline PLC1,420.80 GBP0.00Rating
HSBC Holdings PLC434.80 GBP0.00Rating
Imperial Brands PLC1,582.00 GBP0.00Rating
iShares FTSE 100 ETF GBP Acc GBP12,496.81 GBP0.20Rating
JOHCM UK Equity Income A GBP Inc1.95 GBP0.21Rating
LF Equity Income A Sterling Acc3.40 GBP0.00
Royal Dutch Shell PLC B1,767.60 GBP0.00Rating
Schroder UK Alpha Income A Acc2.14 GBP0.90Rating
Threadneedle UK Eq Inc Rtl Inc GBP0.99 GBP0.57Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk