Henderson fund changes sector following yield drop

Henderson UK Equity Income fund has not generated enough yield to remain in the IMA UK Equity Income sector and has switched over to the UK All Companies sector.

To remain in the UK Equity Income sector, funds need to achieve a historical yield on the distributable income of more than 110 per cent of the FTSE All-Share index’s yield at the fund’s year end on a three-year rolling basis.

The company said the £410.7m fund had “sought to balance income and the prospects for capital growth, rather than simply chase yield”.

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Manager James Henderson added: “For a UK-listed company to grow in a sustained manner it needs to be excellent at what it does with a product or service that is outstanding.

“There are only a limited number of businesses that can do this. The above-average dividend payers in the past were not challenged in their operating environment as hard as they are now and will be in the future.”