Monthly Report

Deutsche Equity Income Trust PLC
8 January 2002


                         Deutsche Equity Income Trust


                    REPORT FOR THE MONTH OF DECEMBER 2001


MARKET BACKGROUND

The UK equity market as measured by the FTSE All-Share index rose by 0.4% in
capital terms over the month. Our net asset value per share rose by 0.6%, but
the share price rose by 0.4% over the same period as the discount to net asset
value widened from 1.1% to 1.3%.

Conditions were generally favourable for income funds as the FTSE 350 Higher
Yield index outperformed the FTSE 350 Lower Yield index by 1.5% in capital
terms. However, although the FTSE 250 index continued to outperform (rising
1.5% in capital terms over the month), the FTSE Small Cap index underperformed
(falling 0.6% in capital terms) following strong outperformance in the
preceeding two months. The best performing sector over the month was Personal
Care & Household Products due to a rally in key constituent Reckitt Benckiser.
Some of the 'cyclical' sectors also performed well, including Distributors,
Electronics & Electrical Equipment and Steel & Other Metals. However, other
'cyclical' sectors performed poorly, including Automobiles and Forestry &
Paper. The worst performing sector over the month was Software & Computer
Services, with investors taking profits following the recent strong rally and
concerns following the profits warning from Logica.

Our purchases included adding to existing holdings in Scottish & Southern
Energy and GlaxoSmithKline as well as buying new holdings in Six Continents
and RMC. Holdings were sold in Standard Chartered, Wolverhampton & Dudley,
Dixon Motors and Allied Domecq. The holding in Emap was also significantly
reduced following recent outperformance.

OUTLOOK

We remain cautiously optimistic about the potential for capital growth due to
an expected recovery in the global economy. However, following the sharp rally
in 'cyclical' shares in recent months, we believe that many companies in these
areas are looking fully valued. In contrast, many of the 'defensive' areas of
the market, such as Pharmaceuticals and Utilities, have underperformed over
the same period and we believe that some of these companies are looking
increasingly attractive despite the recent rise in bond yields.

The outlook for dividend growth, however, continues to deteriorate due to
further downward pressure on corporate profitability and cash generation. In
addition, many companies with inefficient balance sheets continue to prefer
share buybacks over special dividends as a means for returning surplus cash to
shareholders.




                                            31/12/01          30/11/01

NET ASSET VALUE                             241.6p            240.2p

MID-MARKET SHARE PRICE                      31/12/01          30/11/01
Ordinary Shares                             238.5p            237.5p
Dividend Yield (%)                          3.2               3.2

LARGEST HOLDINGS (market value £63.7 million equal to 66.3% of total portfolio)

                                          £'000's      % of portfolio

GlaxoSmithKline                           8,058                  8.4

BP                                        6,933                  7.2

HSBC Holdings                             5,372                  5.6

Royal Bank of Scotland                    4,264                  4.4

AstraZeneca                               4,183                  4.4

Vodafone Group                            3,564                  3.7

Lloyds TSB                                2,696                  2.8

Shell Transport & Trading                 2,592                  2.7

Legal & General                           2,458                  2.6

Barclays                                  2,116                  2.2

BT Group                                  1,798                  1.9

Diageo                                    1,759                  1.8

Forth Ports                               1,686                  1.8

CGNU                                      1,678                  1.7

Centrica                                  1,629                  1.7

Bunzl                                     1,508                  1.6

3i Group                                  1,392                  1.4

Scottish & Southern Energy                1,341                  1.4

Imperial Tobacco                          1,337                  1.4

Canary Wharf Group                        1,293                  1.3

Morrison(W)Supermarket                    1,265                  1.3

United Utilities                          1,246                  1.3

National Grid                             1,240                  1.3

BG Group                                  1,169                  1.2

Enterprise Oil                            1,149                  1.2




For further information, contact Graham Ashby at Deutsche Asset Management on
020-7545-6000.

For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA and Dividend Reinvestment Scheme (a recently established
scheme through which shareholders, who hold their shares on the Company's main
register, can use their dividends to purchase further shares) contact Mark
Pope on 020-7545-0520, e-mail address: [e-mail]. Further details of
Deutsche Equity Income Trust including the latest annual, interim and monthly
reports can be found on the Deutsche Asset Management website located at
www.deam-uk.com/uk/invest/.

Issued by Deutsche Equity Income Trust PLC and approved by Deutsche Investment
Trust Managers Limited, regulated by the Financial Services Authority and
manager of Deutsche Equity Income Trust PLC. Investors should be aware that
past performance is not necessarily a guide to future returns, values can fall
as well as rise and investors may not get back the amount they invested.