RWC's Lance: Are mistakes made before GFC being repeated in UK equity income sector?

One of the reasons income investing has done so well in the long run is that it is a form of value investing.

Low-valued stocks will frequently also have an above-average dividend yield. Crucially, however, this is not always the case and there have been occasions when income fund managers have been exposed to expensive stocks in their pursuit of dividends.  This was the case in the run-up to the financial crisis, when many income fund managers were tempted by the cosmetically-high dividend yields of the UK banks, which at the time accounted for more than 30% of the income available in the UK market (despite being less than 20% of the market cap).  The fact these companies were over-leveraged...