Fund in Focus: BlackRock UK Income

Andy Parsons, Advice team manager at The Share Centre, explains how investors looking for an above-average and growing level of income, without sacrificing the potential benefits of long-term capital growth, could benefit from the BlackRock UK Income fund.

"Given the ups and downs of the stock market and scores of companies cutting dividends, many investors are looking for new ways to generate income while still benefiting from capital growth.

"The BlackRock UK Income fund seeks to address this need, offering investors the potential for above-average and growing income by generating a yield of 110 per cent relative to that of the FTSE All Share.

"The fund is managed by Nick McLeod-Clarke who has over 22 years investment experience and is ably supported by BlackRock's 21 strong UK Equity Team. The portfolio typically comprises of 25-40 stocks determined by their high conviction barbell approach. At one end of the barbell, the fund invests in companies that fulfil the majority of the income requirements. At the other end, investment is in companies that the team believes have the potential to deliver in the future.

"The BlackRock UK Income fund returned 11.4 per cent bid to bid price basis in the 6 months up to the end June 2009, significantly outperforming the UK Equity Income Sector, which returned -2.7 percent.

"In fact, the BlackRock UK Income fund is well known for its strong performance - on a cumulative performance basis to the end of June 2009, the fund ranked first quartile over all key time periods. In addition, the fund's dividend has been raised every year since its launch in 1984.

"To add to the fund's credibility it is rated AA by Standard & Poor's and it is one of only two UK Equity Income funds rated AA by Citywire. The Blackrock UK Income Fund is suitable for investors looking to generate additional income and who are prepared to accept the risk of investing within an equity-backed fund."