The UK has a strong dividend investing culture and many of the FTSE 100’s and FTSE 250’s biggest stocks make regular payouts, many of which rise every year. But it’s hard for investors to select the best prospects for sustainable and growing dividends, with many companies liable to freeze or even axe payouts in difficult years. This is why many investors prefer to shift the responsibility to income fund managers, who can select the best stocks for income and capital returns.
Looking at the best-rated funds in the UK equity income category brings up a small cohort of elite funds.
Here, funds from ClearBridge, J O Hambro Capital Management and Evenloade achieve the highest Morningstar Medalist Rating of Gold.
What Are UK Equity Income Funds?
UK equity income funds invest principally in UK equities that pay out above-market yields. Funds in this category should display a 12-month yield (based on their distributed income) above 110% of the FTSE All Share yield. Funds in this category can invest in companies of any size, though many exhibit a large-cap bias.
The 10 Best UK Equity Income Funds to Buy in 2026
To find the best UK equity income funds to buy, we screened for the lowest-cost primary share classes earning a
- Fidelity UK Equity Income Fund
- Jupiter UK Income Fund
- FTF ClearBridge UK Equity Income Fund
- Man Income Fund
- Artemis Income Fund
- J O Hambro Capital Management UK Equity Income Fund
- Rathbone Income Fund
- Schroder Income Fund
- BlackRock UK Income Fund
- IFSL Evenlode Investment Funds ICVC - IFSL Evenlode Income
Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. Medalist Ratings may differ among the share classes of a fund.
Morningstar expects the highly rated UK equity income funds on this list to outperform their peers over a full market cycle. But even though all the funds on our list fall into the same category, they may practice different strategies, and therefore behave differently from each other. Investors need to do some homework to understand exactly what a particular fund invests in before buying.
Here’s a quick look at some standout picks from the best UK equity income funds. Be sure to review a fund’s complete report for more details.
FTF ClearBridge UK Equity Income Fund
- : £704.3 millionFund Size
- : EAA Fund UK Equity IncomeMorningstar Category
- : GoldMorningstar Medalist Rating
- Ongoing Charge: 0.42
The FTF ClearBridge UK Equity Income Fund is led by a management team with an Above Average people rating from Morningstar and an average tenure of over seven years. Ben Russon stands out as the longest-serving manager, with around 13 years of experience running the fund. Franklin Templeton earns a parent rating of Average.
The £704.3 million fund has climbed 20.02% over the past 12 months, outperforming the average fund in its category, which rose 12.80%. The Franklin Templeton fund was launched in September 2023.
This strategy continues to benefit from an experienced team and long-standing process. We maintain our Above Average People and Process Pillar ratings.
Ben Russon became the sole lead manager following Colin Morton’s retirement at the end of 2022, having worked alongside Morton since 2013 and served as a co-lead from 2020. Russon brings 20 years of UK equity experience, including 13 years at Newton, where he led the Newton UK Opportunities fund from 2005 to 2013. He is supported by comanagers Jo Rands, with 25 years of buy- and sell-side experience (comanager since 2022), and Will Bradwell, co-manager since 2020 and with solid UK equity expertise.
The managers combine their stock-selection process with an assessment of the economic cycle. Top-down views are expected at times to influence the strategy’s sector tilts and help select companies that the team expects to benefit from longer-term trends. The focus is on strong business franchises that possess maintainable pricing power. Thorough balance-sheet analysis is important, as the team generally avoids overly indebted companies, looking for firms that would be able to come through any potential economic or sector downturn.
This is a core, benchmark-aware approach; as such, it aims to add value in a steady, incremental manner over the longer term. The strategy can underperform in strong market rallies or when small caps outperform, but its long-term performance profile is solid and typically boosted by its ability to protect capital relatively well in trickier market environments. This is a sound approach executed by an experienced team, which makes it a solid option for investors seeking core exposure in the UK equity-income space.
The fund has delivered strong relative returns over the long term. From the start of October 2013, when Russon became the comanager, to Aug. 31, 2025, the W Acc share class delivered annualized returns of 7.73%, outperforming the FTSE All-Share Index and the category average by 0.80 and 2.07 percentage points, respectively. Near-term performance relative to the benchmark has been difficult, with the FTSE All-Share proving a tough hurdle for many income managers.
Henry Ince, analyst
Read Morningstar’s full report on the FTF ClearBridge UK Equity Income Fund.
J O Hambro Capital Management UK Equity Income Fund
- : £2 billionFund Size
- : EAA Fund UK Equity IncomeMorningstar Category
- : GoldMorningstar Medalist Rating
- Ongoing Charge: 0.55
Morningstar assigns a High rating to the J O Hambro Capital Management UK Equity Income Fund management team and an Above Average rating to its parent company J O Hambro. The management team has an average of close to 22 years with the fund.
The £2 billion fund has climbed 20.26% over the past 12 months, outperforming the average fund in its category, which rose 12.80%. The J O Hambro fund was launched in October 2023.
JOHCM UK Equity Income continues to offer a strong proposition in UK equity income, a straightforward strategy that has been executed by a very experienced portfolio manager for over two decades. As a result, the fund earns a People Pillar rating of High, while the Process is rated Above Average.
Our conviction continues to be anchored in the long and strong working relationship between Clive Beagles and James Lowen, who have worked together for over 20 years (including time at Newton before JO Hambro) and are highly complementary, with Beagles leading on top-down and Lowen on bottom-up. Beagles and Lowen bring a long track record in UK equities and lean on their experience and judgment. Historically, Beagles and Lowen have worked together, but they hired a junior portfolio manager, Josh Herson, in January 2026. While clearly a nod to long-term succession planning, our conviction is driven by Beagles and Lowen. This is still a small team relative to peers, but as noted, the working dynamic compensates for this.
The process is clearly articulated and has been well executed over two decades. Beagles and Lowen employ a strict yield discipline, looking at stocks with a higher prospective yield than the index, which also acts as a sell discipline. Bottom-up work makes up the bulk approach, where Lowen and Beagles can leverage their wealth of experience in the UK market; they are extremely well-connected to the management teams in the universe. Generally, they look for companies with balance-sheet strength, compelling cash flow generation, and attractive valuations, balanced between desk work and management meetings. The resultant portfolio will be constructed into a 50- to 70-stock portfolio, with little concern for the benchmark. Generally, we see a bias toward mid- and small-cap stocks, and the contrarian nature of the process has led to this weighting increasing as these names have been out of favor, particularly in the UK equity market. The long-term picture is compelling, although the contrarian style does lead to volatile outcomes. Good examples are 2020 and 2018, when bets on cyclical names, as well as an underweighting in large-cap and expensive growth stocks, hurt, furthered by some concentrated position sizes. We saw top-ranked performance over 2021 and 2024. In general, we tend to see stock selection strongly driving excess returns, for better or worse, although their structural value and small-cap biases can also cause divergence, so it is not uncommon to see 10%-plus relative years followed by in-line performance or underperformance. As we might expect, this results in significantly higher volatility than the benchmark, although patient investors have been rewarded over the long term.
Michael Born, analyst
Read Morningstar’s full report on the J O Hambro Capital Management UK Equity Income Fund.
IFSL Evenlode Investment Funds ICVC - IFSL Evenlode Income
- : £1.9 billionFund Size
- : EAA Fund UK Equity IncomeMorningstar Category
- : GoldMorningstar Medalist Rating
- Ongoing Charge: 0.63
The IFSL Evenlode Investment Funds ICVC - IFSL Evenlode Income is led by a management team with an Above Average people rating from Morningstar and an average tenure of around eight years. Hugh Yarrow stands out as the longest-serving manager, with close to nine years of experience running the fund. Evenlode Investment earns a parent rating of Above Average.
The £1.9 billion fund has lost 4.94% over the past 12 months, while the average fund in its category is up 12.80%. The Evenlode Investment fund, which launched in March 2019, has climbed 0.70% over the past three years and gained 3.50% over the past five years.
Lead portfolio manager Hugh Yarrow has managed this strategy since its inception in September 2009, generating impressive long-term returns for investors. We like the investment philosophy, which focuses on quality, dividend growth, and self-investment. The bespoke cash flow framework embeds discipline, and the resulting valuation-driven rebalancing has been additive over time. The approach to risk is central to the process, and this is well-developed. We also like that behavioral biases are explicitly considered, and this differentiates. The many positives of the approach are apparent in the long-term risk-adjusted returns. Given all of the above, the strategy earns an Above Average People Pillar rating and a High Process Pillar rating.
The fund is comanaged by Yarrow, Ben Peters, and Chris Moore, with support from a dedicated analyst, and analytical input from others at this single-strategy boutique. Decision-making deemphasises individuals, and the culture is truly collaborative. The buck stops with Yarrow, who has been the lead manager since launching the fund in 2009. He is a thoughtful investor with 22 years of experience. He has shaped this firm and the investment philosophy since launch, drawing from his experience as a manager of UK income mandates at Rathbones.
Since our last review, Charlotte Lamb was promoted from investment analyst to deputy portfolio manager, which is a nod to long-term succession planning. Lamb joined in 2019 as a graduate. Additional analyst support is provided by Leon Cyril, who joined Evenlode in 2020.
The process seeks to benefit from long-term compounding of cash flows, growing dividend income, and gradual valuation-led rebalancing. It takes a risk-centric approach to equity research and portfolio construction, supported by deep fundamental research.
The proprietary investment management and research platform EDDIE differentiates. It forms the backbone of the process and workflow, including the key cash flow return on investment valuation framework and risk scores. The latter means investment risk is well considered through a selection of 10 risk factors, leading to a risk grade that influences position sizing. Elsewhere, there is no “primary coverage,” meaning that no investors are overly wedded to a company and helping offset risks associated with analyst/portfolio manager departures.
Portfolio construction is well considered and fully permits the team’s research to translate into long-term alpha. Sizing is risk-led rather than conviction-based. Companies with high forward enterprise returns (that is, better valuations) and low risk scores can be held at significant weightings. The team stays dispassionate through a maximum position size framework.
The resulting portfolio has a bias to defensives and industrials. Given the focus on noncyclicality, you won’t find energy, banks, or mining stocks here. As an all-cap strategy, investors should expect a smid-cap bias. The fund makes good use of its ability to invest in off-benchmark names, though these have been reduced more recently on valuation grounds, with more enticing opportunities available in the UK.
Since lead manager Yarrow launched the fund in 2009, performance has been strong relative to the index and EAA UK equity income Morningstar Category. Long-term risk-adjusted performance is equally impressive. The aversion to cyclicality is evidenced by much lower volatility than peers and the index over long periods. Downside capture shows the expected resilience and defensive properties one expects. Stock selection has been a key driver of the fund’s long-term performance.
The fund has underperformed in 2024 and so far in 2025. Its cautious positioning has been a headwind amid a rally in cyclical, risk-oriented stocks, particularly in the banking sector, where the fund maintains minimal exposure. Additionally, stock-specific setbacks in holdings such as Diageo, Bunzl, and London Stock Exchange Group have further weighed on results.
The process is proven over time and has been strictly adhered to. We draw comfort from the discipline shown in light of recent headwinds. The managers have maintained their long-term horizon: investors are encouraged to take a similarly long-term view to be fully rewarded.
The fund has been soft-closed since May 2018: Evenlode is mindful of both liquidity and client-servicing demands. In practice, the fund’s soft closure means it is not actively marketed, and it will not take on large new mandates. It remains available via platforms.
Henry Ince, analyst
Read Morningstar’s full report on the IFSL Evenlode Investment Funds ICVC - IFSL Evenlode Income.
