Video: Evenlode Income's Hugh Yarrow: 'My best investment and biggest mistake' Mr Yarrow said these firms had hardly any debts and produced consistent returns. "These businesses sell things like shampoo, soap and deodorant, which are repeat-purchase products that are extremely resilient," he said, adding that a key ingredient to picking successful companies was their "pricing power." In other words, he likes businesses that can increase prices and still keep customers onside. Mr Yarrow said there were only 80 British companies that were able do this, so these were the only shares he would consider buying. Telecoms, utilities, oil firms and banks are not in the fund. I will only buy businesses with tangible assets that will generate a high return on capital. Refreshingly, Mr Yarrow admitted that mistakes had been made over the past five years. We invested in a French media firm, Vivendi, four years ago but had to sell at a slight loss as it had some problems with its telecoms business. We have now tweaked our investment process and would not invest in a "capital-intensive" business again." Mr Yarrow named Diageo, the company behind Johnnie Walker whisky, as his best investment since the fund was launched in October 2009. Should you buy Evenlode Income and what are the fund alternatives? We ask the experts Patrick Connolly, a financial planner at Chase de Vere, called the Evenlode Income fund "one to watch," saying it could be worth buying if Mr Yarrow continued to perform well over the next couple of years. The fund has only 30 shares, far fewer than other UK equity income funds. This gives Mr Yarrow the opportunity to outperform significantly when he makes the right calls, which he has done so far," he said. But Mr Connolly said his favourite funds in the sector were Threadneedle UK Equity Alpha Income and Rathbone Income. Tom Becket, who buys funds for Psigma Investment Management, said there were better options elsewhere. "The Evenlode Income fund's strategy is sensible, but because Mr Yarrow will not buy certain sectors, it actually makes the fund a bit more risky compared with other funds," Mr Becket said. This is because there is less diversification across different types of company. Instead Mr Becket favours the Schroder Income Maximiser fund, which targets a yield of 7pc. This fund has an exciting tilt towards consumer-focused British shares, but is more diversified by sectors and in the number of stocks held. Other options worth considering include Woodford Equity Income, managed by Neil Woodford. Another is the City of London investment trust, which has increased dividends for the past 47 consecutive years.