Look beyond the traditional UK equity income sector to alternative income funds, and you will find enticing yields growing in line with inflation, low or no sensitivity to the economic cycle and, thanks to share-price weakness in 2022, attractive discounts to net asset values (NAVs). But many of these funds carry a risk investors habitually ignore: their businesses are very dependent on the UK. Domestic revenues and earnings are vulnerable to weaker sterling, the long-term trend of which has been downwards.
The misfortunes of the social-housing funds, such as Civitas and Home Reit, serve as a reminder that much of the public and third sectors resent private-sector involvement, especially if it is for profit. Taxation can be changed on a whim, as it was for
