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Investment Association issues Covid-19 equity income guidelines

coronavirus_guidelinesThe UK’s Investment Association has issued new guidelines on the UK and global equity income sectors to shore up their effectiveness for savers and investors amidst the Covid-19 crisis.

According to the trade body, the guidelines are designed to prevent any short-term disruption to the sectors, so savers can continue to identify and compare equity income funds.

They will also enable fund managers to focus on long-term outcomes for savers by temporarily suspending the annual 90% yield threshold test for funds with a year end after February 2020. The suspension will last twelve months – any funds that do not meet the annual yield limit will be automatically removed from their sector. 

The association is also to suspend the enforcement of its three-year test, as the current circumstances are expected to have an impact on the three-year average rolling yield.

Finally, monthly monitoring data will continue to be published publicly on the IA’s website for transparency’s sake. 

Jonathan Lipkin, director of policy, strategy and research at the Investment Association, said: "The measures we’ve introduced today will continue to provide savers with transparency on fund performance, while helping prevent short-term disruption to the equity income sectors, which are particularly affected by the economic consequences of Covid-19.”

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