Equity income funds might have underperformed so far this year, but that does not mean they should be written of as investments, according to one expert.
Chris White, a member of Threadneedle's income team, explained that although growth funds have been performing better as of late, investments offering a good level of performance are becoming harder to find.
He said: "When conditions get really tough and equities come under pressure, dividends become a more important component of total return. That's certainly the situation now."
For this reason, equity income funds - which offer consumers the benefits of dividend payments - could be set to become increasingly attractive investments, he added.
A cut in interest rates should boost banks and other sectors which traditionally offer high payments, Mr White stated.
Yesterday, Nick Raynor, investment advisor at the Share Centre, claimed that UK banks still offer good long-term potential, despite recent poor results.
Equity income funds still good investments, expert claims
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Equity income funds still good investments, expert claims
Tue, 12 Aug 2008
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