In the current economic climate investors are in search of that ever-elusive yield.
With economic growth sluggish and the bond market suddenly more correlated to equities than ever before, the equity income sector has become an attraction for many.
The draw with equity income is the promise of capital growth along with dividend yield. And as we know, much stock market growth over the long-term is driven mainly by the total-return attributed to dividends.
But equity incomes is not necessarily a panacea. For example, in the 12 months to 17 December 2012, the top-performing fund in the IMA Global sector returned £1,252 on an original investment of £1,000. Conversely, the top IMA Global Equity Income fund, shown in the table below, returned £1,184.
|Top 5/Bottom 5 IMA Global Equity Income funds|
|Artemis Global Income||1,184|
|Schroder Global Equity Income||1,183|
|Lazard Global Equity Income||1,175|
|Sarasin Global Equity Income Stg Hdg||1,169|
|Standard Life Glbl Equity Income||1,169|
|BlackRock Global Income||1,094|
|Aberdeen World Growth & Income||1,090|
|Skandia Global Equity Income||1,082|
|Guinness Global Equity Income||1,074|
|Pictet High Dividend Selection||1,068|
|Figures as at 17 December 2012. Source: Morningstar|