The return of the kipper tie: Style change favours UK equity income

Value investing back in vogue

Once upon a time, UK equity income funds were often the cornerstone of a domestic investor’s portfolio.

But times and fashions change. UK equity funds, and equity income in particular, have suffered years of outflows. In 2021 alone, UK investors dumped £8.2bn worth of equity income funds. With a couple of modest exceptions, the sector's flows have been persistently negative since the first quarter of 2016. In part, this has been a performance issue, with the British market lagging developed market peers such as the US for years. Another, perhaps more persistent, factor has been investors rebalancing their portfolios away from a strong domestic bias. That is likely to be an o...