The Investment Management Association is looking at devising a standardised way of calculating yield for the UK equity income sector.
All funds are required to disclose yields but some firms have been concentrating on coming top of the total return rather than yield tables.
Equity income funds are meant to deliver a yield of at least 110 per cent of the yield of the FTSE All Share.
Figures from Morningstar show that while managers such as Neil Woodford top the UK equity income sector in terms of total return, the latest yield return on both his income and high-income funds, which are 4.07 per cent and 2.48 per cent respectively, fall below the 4.3 per cent sector average.
The top-yielding fund, Scottish Widows UK equity income portfolio, is fourth quartile over one, three and five years.
IMA head of communications Mona Patel says: “This is something that we have been talking to our members about, as there is no regulation that defines which way a fund declares its yield and what we want is one way to calculate all of these funds and then present that as a plausible solution to the FSA.”
Cofunds communications officer Richard Eats says: “The important thing is that while these funds do chase growth of income, they still do what they say on the tin, something which the IMA has to keep an eye on.”