You are viewing as from Change
Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.
An income fund aims to generate income by investing in a range of dividend-paying stocks, aiming to increase earnings and the value of the original investment over the long term. Funds in the Investment Association’s UK Equity Income sector, for example, invest at least 80% in UK companies and aim to generate income greater than that of the FTSE All Share’s yield over three years.
The FTSE All Share gives investors access to one of the world’s major economies, with plenty of UK companies paying substantial and growing dividends to their shareholders.
Stocks that pay out high dividends are often associated with a style of investing known as ‘value’.
Key benefits of an equity income fund
- As with other mutual funds, equity income funds offer diversification. This can provide protection to investors from the risks associated with holding individual stocks, however no investment is risk free.You may get back less than you originally invested.
- On the whole, equity income funds can also offer a higher potential return than other income investments such as bonds or cash. Because of this they are valuable tools for long-term investors who are able to endure a certain degree of equity market risk.
- Although bonds can be used to generate income through interest payments, or ‘coupons’, using equities has the advantage that the income from dividends should have a high degree of protection against inflation. This is because companies can often raise their prices in an inflationary environment. Equities also offer the potential for capital growth via rises in the prices of the underlying companies held.
- If you feel you do not have the time, knowledge or inclination to manage your own portfolio of investments, you can delegate this to a professional manager by investing in a UK equity income fund.By investing just a few hundred pounds, you can usually obtain exposure to far more assets and industry sectors than you can by investing directly in the market yourself.
- The UK is renowned as a trusted commercial environment. It was ranked eighth in the World Bank’s Ease of Doing Business Index in 2019 and its rule of law, regulatory system and property rights make it a highly attractive market in which to operate, trade and invest.
- Although the UK became an ‘unloved’ investment market after it left the European Union, the fact remains that it has a robust economy and offers outstanding income-generating opportunities for investors who are happy to invest for the long term.
It is worth noting, however, that equities tend to be more volatile than bonds, so investors in equity income funds should invest for the long term of five years or more. The longer that investors stay invested, the greater the chances that their income and capital will grow.
Selecting the best manager is a challenge
The funds offered by Liontrust are actively managed, meaning that you have a professional determining which assets to invest in at any given time.
Selecting the best managed funds can be a challenge. If in doubt, you can seek the professional advice of a qualified financial adviser.
Liontrust’s funds are managed according to investment processes that have the potential to deliver excellent long-term returns with effective risk controls. These processes are robust, scalable and repeatable and are documented, which has advantages for Liontrust, fund managers and, most importantly, our investors, who know exactly how each of our teams will manage their money. Our distinct culture and approach to running money creates an environment in which our fund managers and employees can flourish, helping our investors to reach their financial goals, supporting companies in generating sustainable growth and empowering and inspiring the wider community.
Your preferences
Register your preferences and receive tailored communications from Liontrust.
Register now
Our funds Find out more about our range of funds and portfolios Our Funds
Insights Our latest fund manager views, fund updates, podcasts and videos Insights
Learning Learn more about managing your money Learning
Assessment of Value Read the report Assessment of Value
FAQs
Equity income primarily refers to income from stock dividends, which are cash payments from companies to their shareholders as a reward for investing in their stock. In other words, equity income investments are those known to pay dividend distributions.
Are equity income funds safe? ›
Just like other mutual funds, equity income funds provide investors with diversification. This means that they are less exposed to the risks of holding individual stocks. Given dividend-paying stocks tend to be quality, well-established businesses, they are usually less volatile than the wider equity market.
Is Liontrust a good investment? ›
What are the analyst and broker recommendations for Liontrust Asset Management? The overall consensus recommendation for Liontrust Asset Management is Buy.
What does Liontrust do? ›
It manages open-ended funds domiciled in the UK and Ireland, multi-asset portfolios, the Edinburgh investment Trust and segregated accounts. Liontrust handles investments for clients in Europe and South America.
Why would investors want equity income funds? ›
Just like other mutual funds, equity income funds provide investors with diversification. This means that they are less exposed to the risks of holding individual stocks. Given dividend-paying stocks tend to be quality, well-established businesses, they are usually less volatile than the wider equity market.
Are equity income funds a good investment? ›
Risk and Return
Equity funds generally carry higher risk compared with income funds because of the inherent volatility of the stock market. However, they also offer the potential for higher returns over the long term.
What are the disadvantages of income fund? ›
Performance Measurement: In most cases, income funds are not able to measure performance effectively. Especially dividends, the yield that is realized may overlook actual financial gain.
Why are equity funds high risk? ›
Small-cap and mid-cap equity funds are typically considered high-risk, high-return options as they invest in smaller companies with significant growth potential but heightened volatility.
What are the risks of income funds? ›
Income risk is the risk that the income stream paid by a fund will decrease in response to a drop in interest rates. This risk is most prevalent in the money market and other short-term income fund strategies (versus longer-term strategies that lock in interest rates).
Is Liontrust Russia suspended? ›
Yes - we have suspended both purchases and sales in the Fund. Investors' ability to redeem from the Fund and when this might happen are dependent on the outcome of the current conflict, the lifting of sanctions on and by Russia and the ending of capital controls.
11 best investments right now
- High-yield savings accounts.
- Certificates of deposit (CDs)
- Bonds.
- Money market funds.
- Mutual funds.
- Index Funds.
- Exchange-traded funds.
- Stocks.
A mild recession is our central forecast for 2024. Private sector balance sheets are entering the downturn from a position of aggregate strength so this should prevent the recession from being deep.
Who is the parent company of Liontrust? ›
We are an independent business with no corporate parent, our head office is on the Strand in London and we have offices in Edinburgh and Luxembourg.
Is Neptune now Liontrust? ›
The former Neptune funds have all been rebranded as Liontrust and the Neptune Global Income Fund is now called the Liontrust Global Dividend Fund. Liontrust has stated that there will be “no change to the managers running the funds or the investment process used.”
Did Neptune become Liontrust? ›
In a regulatory filing today, the asset manager confirmed the Neptune investment team, headed by Robin Geffen (pictured), would be renamed the Liontrust Global Equity team. Neptune's investment team brings with it 19 Global, Income, Regional and Emerging Markets funds. All the funds have all been rebranded.
What is an example of an equity fund? ›
Equity funds are categorized based on their focus on specific sectors or geographic regions. Sector funds invest in the stocks of companies operating within a particular industry or market sector. Examples include technology, health care, financial, real estate, energy, and utility funds.
What is the difference between equity fund and equity income fund? ›
Stocks are traded less frequently—they can be held anywhere from 3 to 5 years. To make a comparison, Pinnacle's core equity portfolio is a large-cap strategy that is more growth oriented. Our equity income portfolio is also a large-cap strategy, but it is more focused on earning income through dividends.
What is an example of an income fund? ›
Example of an Income Fund
The T. Rowe Price Equity Income Fund has $17.51 billion in net assets as of Q1 2021 and seeks a high rate of growth through high dividend-paying stocks in combination with capital appreciation. The fund, which distributes payouts quarterly, paid a dividend of $0.18 per share on Dec.
Is Vanguard equity income a good fund? ›
Overall Rating. Morningstar has awarded this fund 4 stars based on its risk-adjusted performance compared to the 1118 funds within its Morningstar Category.
