Kames' Equity Income duo criticise IA's 'Hokey Cokey' sector changes

IA lowered the yield hurdle from 110% to 100%

Kames Capital's UK Equity Income co-managers Douglas Scott and Iain Wells have argued the Investment Association's recent changes to the UK Equity Income sector make no sense and will cause confusion in the wider market.

The duo have said the yield requirements have been lowered so much the sector has become redundant, going as far as labelling it the "IA Hokey Cokey UK Equity Income Fund sector". Back in March 2017, the IA said it was lowering the UK Equity Income sector's yield hurdle from 110% to 100% of the FTSE All-Share index yield over a three-year rolling period, but failure to achieve a 90% of the index yield in any one year would lead to exclusion from the sector. Wells said: "A UK Equity Income fund should offer a premium yield relative to the market, otherwise is it not just a UK Equity fu...