The IMA UK Equity Income sector has traditionally attracted risk-averse investors looking for stable returns and a steady income stream. So in the UK retail space, where, on the whole, investors prefer to opt for domestic offerings, the sector has been a familiar presence at the top of the best-sellers list.

Up until a year ago, in the bull-market period when risk was handsomely rewarded, funds within this sector rarely offered "shoot-the-lights-out" performance but made up a key part of a well-balanced portfolio.

Then, with the onset of the credit crunch, UK Equity Income was hit particularly hard, despite managers' predilection for "safe" large-cap stocks. This was largely because of their overweight positions in the financials sector - historically a big dividend payer.

A year after the crisis first seized the US - before spreading across the globe - performance figures tell a story of a gloomy time for most managers in the sector.

On a cumulative basis over one year to July 28, the average return for the sector was a loss of 17.9 per cent. This compares with a fall of 12.1 per cent for IMA North America and 15.4 per cent for IMA UK All Companies.

However, the average figure masks a broad range of results, with top-performer JM Finn UK Portfolio Retail losing 7.6 per cent, while the Chelverton UK Equity Income fell 35.9 per cent.

In a sector with a generous smattering of star managers, it is also notable how individuals have reacted to the change of pace in the markets. In general, the most successful have been those with the greatest autonomy over asset allocation, with the freedom to move in and out of positions quickly.

With a tenure of 15 years on the two largest funds in the retail arena - the £8.48bn ($16.2bn) High Income and £5.96bn Income - Neil Woodford, head of investments at Invesco Perpetual, is one of those managers who has generally got his timing right - achieving sector-beating results and an average yield of about 4 per cent, thanks in part to his love of tobacco stocks and utilities.

But the funds have fallen from their first and second positions over three years, on a cumulative basis, to 12th and 13th over one year, recording losses of about 11 per cent for that period. For investors used to annualised returns of up to 26 per cent, this has been disappointing. On a long-term basis, though - and in comparison with his peers - Mr Woodford has traversed the terrain well.

"With less than 6 per cent in the financial services sector in mid-2007 and nearly 10 per cent in cash or equivalents, Neil Woodford neatly sidestepped the worst of the carnage," explains Chris Traulsen, director of research for Morningstar. "He also resisted the urge to chase faddish mining stocks; instead, he stuck with old standbys, such as tobacco and utilities. Make no mistake, as we've pointed out in the past, these allocations pose their own risks, but they are exactly the type of issues that should hold up well in an economic downturn."

The £252.8m New Star Equity Income fund is also likely to attract interest as Charles Deptford takes over from Stephen Whittaker following a period of underperformance.

Laura Mossman is features editor at Investment Adviser