Hargreaves Lansdown has suggested that investors switch out of both the Scottish Widows UK equity income and Swip UK income funds.
Both funds are perennial underperformers and currently sit bottom quartile in the IMA UK equity income sector over three years.
Hargreaves Lansdown says the £693m Scottish Widows UK equity income fund, which has been managed by Richard Dunbar since June 2000, has seen a deterioration in its stock selection within the fund and that underlying performance is likely to remain poor. The fund has fallen 17.5 per cent over three years, compared to an average fall of 10.6 per cent for the sector.
Chris Fontela took over the management of the £66.4m Swip UK income fund from Dunbar in January 2010, however Hargreaves Lansdown says that the fund has failed to improve its returns and is currently ranked 101 of 104 funds in the sector since he took over.
In both cases the firm recommends a switch into the Artemis income fund, which is managed by Adrian Frost and Adrian Gosden and is currently top quartile in the IMA UK equity income sector over three years.