It will not come as a surprise to many readers to learn that UK equity income funds are significantly more popular in income portfolios, but there are some more interesting insights which we gleaned while breaking down fund holdings in these vehicles.
There are only 17 UK growth equity funds in our income database compared to 48 in our growth portfolios database. Meanwhile 23 UK equity income funds are used in income portfolios with 24 used in growth portfolios.
The most popular fund in income portfolios is Man GLG Income by some distance, which means it is the most popular fund house - despite the fact some house have more funds represented.
As far as style goes, the tilt is very heavily towards value for obvious reasons, with 62 per cent of fund in our income database described as having a value style by Morningstar. This goes up to 75 per cent when considering just income funds.
But we were curious to know whether the growth funds which income allocators were using had a strong overcompensation towards growth or if they followed the value tilt.
And the answer appears to be: neither. The vast majority of UK equity growth funds in these portfolios - with the most popular ones being Vanguard FTSE 100 Index, JOHCM UK Dynamic and L&G UK 100 Index all held by two allocators each - have a style described by Morninstar as "mixed".
But given these are funds which should perhaps have a growth style bias, 76 per cent of them being mixed is a kind of tilt towards value - sort of.
One area where there is a strong distinction between the growth and income funds chosen by income portfolio builders is that the growth funds tend to be passive while the income funds tend to be active.
Some 60 per cent of the growth fund holdings are passive while 96 per cent of the income fund holdings are active.
This means that overall, 83 per cent of UK equity fund holdings in income portfolios are active.
In income portfolios, allocators demonstrate as much of a willingness to work with boutique fund managers as they do for growth portfolios.
A quarter of the fund holdings in our income database are managed by fund houses which, overall, each have less than £10bn of AUM. This proportion increases to 45 per cent when the threshold is moved up to £50bn.
Much of the fund holdings at the opposite end of the spectrum - in funds run by the giants of the sector - are growth equity funds and are trackers run by Vanguard, L&G and BlackRock.
How do these funds perform, then? When thinking of income, performance is perhaps not the best metric but income allocators are actually pretty good at unearthing winners among UK equity funds.
More than half of the funds selected provided top quartile returns over the past three years. In fact 75 per cent of the UK equity funds in our income database outperformed their sector. This is a better performance than fund selectors building growth portfolios, where just shy of half of the funds chosen were top quartile.
And what about cost? As in other sectors, there was a clustering of OCFs between 0.6 and 0.9 per cent. In fact the OCF break down here reflected that in growth portfolios - expect perhaps there were fewer funds at the top end of the spectrum.
As always, these are the publicly reported OCFs, and allocators may well be getting better deals straight from the fund manager.
