View more on these topics

Funds fail to meet IMA’s yield target

Over a third of UK equity income funds are not yet achieving the Investment Management Association’s new yield requirement with less than six months to go before the deadline.

Of 92 funds in the sector, 37 are failing to produce a yield that would meet the new definition due to start at the end of 2008. Funds must invest at least 80 per cent in UK equities and aim to achieve a yield on the distributable income in excess of 110 per cent of the FTSE All Share yield.

Big-name managers yet to achieve that yield include Invesco Perpetual’s Neil Woodford and Jupiter’s Tony Nutt.

Some funds are more than a percentage point away from achieving the average yield, according to Lipper figures.

The FTSE All Share yield was 4.26 per cent at July 7, so a fund would need to yield 4.68 per cent to qualify.

An IMA spokesperson says: “Those who were breaching the requirement as at January 2008 were notified in March and April and have been given until January 2009 to comply with the definition. Funds that fail to meet the parameters after the one-year period will be removed from the sector.”

Hargreaves Lansdown investment manager Ben Yearsley says: “I would prefer managers to focus on the best opportunities rather than chasing income. The longer they fail to make the yield criteria, the more you have to question if they are in the right sector. It is not an immediate concern but some yields are worryingly low.”

Newton higher-income manager Tineke Frikkee says: “I would be surprised if everyone stayed in the sector once the 12 months are up. It will change the landscape as performance chasing is counteracted.”


Conforto buys Herts IFA

Conforto Financial Management has bought Hertford IFA The McCroddan Partnership for an undisclosed sum.

Market dips into bear territory

The UK officially dipped into a bear market this week after the FTSE 100 index declined by more than 20 per cent since its peak last autumn.

Tories to end stealth on taxes

The Conservatives have pledged to reform the way that tax law is made, including publishing major changes no later than the pre-Budget report before the next year’s Finance Bill.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm