UK equity income funds made a comeback last year, with more than nine out of 10 funds outperforming the FTSE All-Share index, according to data from HSBC.
Despite their stronger performance, the average UK equity income fund still produced a negative return of -1.2 per cent for the year while the All-Share index fell by 5.1 per cent.
Ninety-four per cent of UK income funds beat the index over the 12 months to December 29 compared with under 40 per cent over the past three, five and 10 years.
But Simpsons partner Andrew Merricks believes the equity income sector's fortunes are merely cyclical.
He says: “The stocks they have got to choose from, by definition, will outperform at some point. The days when equity income was regarded as the best growth option are definitely over.”