In July 2010 the Investment Association combined the UK Equity Income and UK Equity Income and Growth sectors into the UK Equity Income sector and revised the sector definition. We also decided to publish the annual yield figures achieved by funds in the sector and these are shown in the yield spreadsheet.
Following an extensive consultation process the sector definition was revised in 2017 as follows:
Funds which invest at least 80% in UK equities and which intend to achieve a historic yield on the distributable income in excess of 100% of the FTSE All Share yield at the fund's year end on a 3 year rolling basis and 90% on an annual basis.
Specific sector notes:
1. To ensure compliance with the sector criteria, funds should supply data for monitoring to enable the calculation of historic yield based on The Investment Association guidelines set out in "Authorised Funds: Yield Calculation and Disclosure Guidelines - 2012".
2. Funds are required to submit yield data at the fund’s year end to the sectors team at The Investment Association and to the monitoring company.
3. To ensure compliance with the intended 100% yield, funds in the sector will be tested over 3 year rolling periods by taking a simple average of the yield figure achieved for each fund at its year end. Funds that fail to exceed the 100% average yield for each 3 year rolling period will be removed from the sector. (As an illustration, this would require a fund that delivered 90% in the first year and 100% in the second year to deliver a yield in excess of 110% in the third year, if it were to be allowed to remain in the sector).
4. Annually, at the fund’s year-end, each fund in the sector must achieve a yield of not less than 90% of the FTSE All Share yield. Funds that fail to do so will be removed from the sector.
5. The Investment Association will measure yield to one decimal place.
6. To assist users of the sectors and aid comparison, The Investment Association will publish the annual yield achieved by each fund in the sector.