Which UK income funds will thrive this year?

SECTOR ANALYSIS

For some time now, discussions on the provision of income have centred around the need to find lower risk assets that can provide a reasonable level of income.

Until very recently, the level of real return for savers has been negative and they have been encouraged to take additional risk to fund income requirements. At the same time, equities have been yielding above long-term trends thanks to low valuation levels and relatively stable dividend payments. The current economic climate and the need for income has increased the debate regarding the most appropriate alternatives for maintaining income over the coming year. We have had a significant rally in equities, and the strong dividend paying companies are now looking fairly, if not over, va...