Rates cuts boost equity income's appeal

Equity income funds are yielding more than cash for the first time in 40 years following recent interest rate cuts. Rates look unlikely to rise in the immediate future, helping equity income funds remain the asset class of choice for many intermediaries. With the FTSE All-Share yielding around 4%, the income that can be delivered is attractive relative to deposit accounts as official UK interest rates have been slashed to 3.75%. Many income funds yield more than 5%, while the average yield of the 79 funds in the UK equity income sector is 4.53%, according to Standard & Poor's. B...