UK equity funds have fallen in value since Brexit and are now offering an improved yield for investors, with the FTSE 100 as a whole forecast to yield 4.8% for 2019, according to data from AJ Bell.
Investors have withdrawn £4bn out of UK investor funds in the past year, and more than £14bn in total since the EU referendum in 2016.
AJ Bell has been analysing the current state of equity income funds in the UK, after last week Neil Woodford was ousted as investment manager from his £3.5bn flagship fund, Woodford Equity Income Fund.
While the investment platform has been vocal about the UK’s decreasing property funds since the Woodford situation, AJ Bell has suggested there is still reason for investors to remain positive.
AJ Bell personal finance analyst, Laura Suter, commented: “UK equity funds in general have been unloved since the Brexit referendum in 2016, with investors withdrawing more than £14bn during that time.
“However, UK equities have fallen in value and are now offering a decent yield for investors.
“Clearly Woodford has taught us that past performance is no guide to future returns, but it still serves as a useful tool to see how a fund has performed.
“This is particularly the case with income funds, as we can see how much the manager prioritises income payouts in their management of assets, and how they balance this with capital returns. It’s all well and good having sizeable income payouts, but you don’t want to see your capital fall as a result.”
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