By Charlotte Beugge

Gloomy news from Anglo-Swedish pharmaceutical company AstraZeneca could hit millions of investors who may not even realise they hold the company's shares.

The firm announced that it is to cut 7,300 jobs by 2014 and said that it expects this year to be "challenging" as several of its best-selling drugs come off patent soon, meaning that other companies could produce them.

It says that as a result, earnings per share for this year could be 14% to 18% lower than last. It is also to implement a share buy-back. All this is grim news if you work for AstraZeneca, of course, but it's also bad for anyone with money in some of the largest equity income funds.

Drugs companies such as AstraZeneca are favourites of these funds because they tend to pay a steady stream of dividend income and also they are not unduly affected by the economic climate.

Britain's two largest investment funds, Invesco Perpetual High Income and Income, which have more than £20 billion of investors' money managed by Neil Woodford, are big holders of AstraZeneca as are the £3.9 billion Artemis Income and the £2 billion Jupiter Income.

However as in all these cases the stock will be only one of many different shares held by the funds, any downturn in the AstraZeneca price should not have a dramatic effect.

This dilution is the main reason why investors will usually be better off - and sleep easier - if they hold funds rather than individual company shares.