Schroders accounts for three 'ultimate' UK equity income funds over the past five years, including the sector's top performer, a Trustnet study has shown.
To gain the 'ultimate' status, funds in the IA UK Equity Income sector needed to pass three criteria. First, they must have produced a top-quartile return over the past five years to the end of 2025.
Second, they must have paid an above-average income over this time. To determine this, we only looked at the average of all funds with a full five-year dividend history. This came to £2,699.65.
Lastly, the funds must have grown their income paid out each year from 2020 to 2025. We ran all of the above figures based on an initial £10,000 invested at the start of 2020.
The result is 11 funds that can claim to be among the 'ultimate' UK equity income portfolios. Three come from Schroders, with Schroder Income boasting the largest total return over the period after growing the initial £10,000 to £21,127.08.
| The ultimate IA UK Equity Income funds | ||
| Fund | Total return over 5yrs | Dividends paid over 5yrs |
| Schroder Income | £21,127.08 | £3,189.97 |
| UBS UK Equity Income | £20,361.91 | £2,928.34 |
| BNY Mellon UK Income | £20,187.49 | £2,908.58 |
| Schroder Income Maximiser | £20,182.65 | £5,111.14 |
| Vanguard FTSE UK Equity Income Index | £20,093.47 | £3,553.86 |
| Jupiter UK Income | £19,748.80 | £2,999.33 |
| Man Income Fund | £19,226.80 | £3,424.26 |
| VT Munro UK Equity Income | £19,157.86 | £3,268.63 |
| Barclays UK Equity Income | £18,137.78 | £2,991.54 |
| Schroder UK-Listed Equity Income Maximiser | £17,956.99 | £4,595.80 |
| FTF ClearBridge UK Equity Income | £16,639.68 | £2,816.82 |
Source: FE Analytics
Managed by Andrew Lyddon and Tom Grady, this £1.2bn fund employs the same strategy as the global value team headed by Simon Adler. The managers screen for cheap companies, only able to select stocks from the most discounted part of the market.
Analysts at FundCalibre have given the fund an 'Elite' rating, noting that its strict valuation focus is "unusual in an income fund, which allows Schroder Income to differentiate itself from others in the sector".
"The process, which has been in place for a substantial number of years, can lead to shorter periods of underperformance, but the core discipline of buying cheap stocks has generated good long-term outperformance and a good income," they said.
Formerly managed by Nick Kirrage and Kevin Murphy, with Lyddon and Grady taking charge last year, the fund was removed from some best-buy lists but remains highly regarded among others, such as FundCalibre.
It is also recommended by analysts at RSMR, who said the team is "well resourced" and has "significant collective experience investing in the value style". At times returns can differ widely from the benchmark, but for patient investors, the fund offers the potential to significantly outperform over longer periods. The fund would make a good choice for income-seeking investors where long-term total return is also an important consideration, RSMR said.
They agreed that there will be times when the fund is out of favour, noting that they would use the fund as a diversifier in a wider portfolio.
RSMR analysts also recommended the second-placed fund: UBS UK Equity Income. This £418m fund is managed by Chloe Hickey-Jones and Jessica Kaur, who run a value-orientated strategy.
"The fund can be used as a core holding and is a good candidate to be blended with either an index, growth or quality orientated fund," RSMR analysts said.
"Using the fund in conjunction with others should offer a good balance to a UK allocation, with value-orientated market regimes providing ideal conditions for this fund to perform strongly."
Several other funds on the list caught the attention of different experts. Analysts at AJ Bell are hot on the £2.3bn Man Income fund, headed by FE fundinfo Alpha Managers Henry Dixon and Jack Barrat.
They said: "This UK equity fund's disciplined valuation investment approach, which the lead fund manager [Dixon] has developed over many years, is a real benefit here.
"Additionally, his analytical mindset provides a level of pragmatism that allows the fund to navigate through a variety of market conditions."
However, they noted that by investing across the market capitalisation spectrum and being completely benchmark agnostic, the fund can be more volatile than some of its peers.
One spot ahead of it on the list, Jupiter UK Income is run by Adrian Gosden and Chris Morrison, who took over the fund from Ben Whitmore in 2024, moving over from GAM to do so.
The duo were also previous involved in the hugely popular Artemis Income fund for many years. While the £1.6bn Jupiter UK Income fund suffered outflows after Whitmore's departure, its assets under management have risen steadily over the past year.
It remains on the recommended list of analysts at Titan Square Mile, who liked the managers' focus on "free cashflow generation, the sustainability of this and how this drives the ability of companies to pay sustainable and growing dividends through time".
The managers will take exposure further down the market capitalisation spectrum where they see opportunities, although at least 70% of the portfolio's assets will be invested in FTSE 100 listed names at all times.
"We view this as a solid option for investors seeking exposure to a relatively high conviction portfolio of income-generating stocks, and which is managed by a highly capable investment duo," Titan Square Mile said.
Lastly, at the foot of the table, FTF ClearBridge UK Equity Income is a favourite of analysts at Fidelity Personal Wealth, who have included it in the firm's Select 50.
Alpha Manager Ben Russon, alongside co-managers Will Bradwell and Joanne Rands, are based in Leeds and "seasoned UK managers" who have "strong experience finding companies that can pay sustainable and growing dividends".
"This fund can be helpful for clients seeking dividend income from companies primarily listed in the UK. Like any equity fund, it is higher risk and may be subject to fairly substantial but hopefully transitory drawdowns. Investors will need a long-term view of 10 years or more," Fidelity Personal Wealth said.
Previously in this series we have looked at the top-paying UK income funds over the past five years. We also looked at their IA Global Equity Income equivalents, and also determined the ultimate global equity income peers.