Feature article: Equity Income – UK or Global? Should investors widen their horizons? Introduction: ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the general UK market but also has a strong track record of dividend growth. Indeed, many funds feature on the AIC’s “dividend heroes” list for the number of years of consistent growth. ► The UKEI is also marked by the longevity in the role of many of the fund managers. In addition, it has some of the longest-established funds. ► This note asks whether there is justification for investors seeking income to consider three other sectors: Global, Global Equity Income (GEI) and Asia-Pacific Equity Income (Asia-Pac EI). Some investors may want to consider investing part of their portfolios in non-UK funds to diversify their risk; others may think of them as replacements for the UK. ► Although, strictly speaking, not defined as an “equity income” sector, we decided to include the global sector for comparative reasons, because it figures quite highly in the AIC dividend heroes. ► The global income funds benefit from the ability to fish in a wider pool of possible holdings than the UKEIs. They also give the investor currency exposure. ► Another reason to consider the global funds is their superior share price performance over 10 years. Finally, although the starting yield is lower than that of the UKEI sector, these global funds have, historically, seen faster dividend growth. ► The two questions we seek to answer are why would you still want an income fund, and, if you do want to invest in one, should you consider a global fund, as well as a UK one? ► Overall, we believe that the UKEI remains attractive for investors, but we nevertheless believe an increased awareness of other global opportunities is warranted.