Report to 31 December 1999

Deutsche Equity Income Trust PLC
26 January 2000


The Deutsche Equity Income Trust supports the AITC its campaign

Deutsche Equity Income Trust
                                       
                                                                              
                          REPORT TO 31 DECEMBER 1999
                                       
                                       
                                       
MARKET BACKGROUND

The  UK Equity market, as measured by the FT-SE All-Share Index rose, by 14.7%
in  capital terms in the three months to the 31 December.  The strength of the
market  was  largely  attributable  to the  rise  in  growth  stocks,  and  in
particular  technology related issues.  In contrast the share prices  of  many
more  cyclical  companies actually fell in value over  the  period.   In  many
sectors the impact of intense competition on prices led to lower revenues  and
pressure on profits.  The scarcity of growth accounted for investors' appetite
for technology companies.

This  made  a  difficult  background for income funds  as  many  of  the  poor
performing  shares  were in the higher yielding sector  of  the  market.   The
Company's  net  asset value rose by 11% underperforming the  market  by  3.7%.
However this return compares favourably with other income funds in general.

Despite  the  weakness of higher yielding stocks over the period we  were  not
tempted to increase exposure to those companies.  In many cases there is still
a  danger that returns may fall, particularly in some of the consumer  stocks,
and this would undermine valuations further.

Where we did purchase more cyclical economically sensitive stocks we added  to
existing positions in Burmah, Rexam, Lonmin and Laporte, believing that  these
are  capable of delivering some growth.  We took profits in some of  our  more
growth  orientated  companies,  good  examples  being  Energis,  Marconi   and
Bowthorpe.

OUTLOOK

Although  we  expect growth to strengthen, we do not believe  that  this  will
alter the competitive nature of the economic environment.  Low inflation  will
continue  to  persist,  making life difficult for companies,  whilst  interest
rates  are likely to rise further to control the rate of growth, which  should
subdue  markets.  The short term is therefore likely to be difficult, although
we  are confident that the longer-term economic environment will prove helpful
to  equities.   Our strategy remains to be mainly invested in those  companies
best able to withstand an environment of low growth and low inflation.



                                             Fully diluted
NET ASSET VALUE        31/12/99   30/09/99  31/12/99  30/09/99
                         272.5p     244.6p    266.2p    239.3p
                        

MID-MARKET SHARE PRICE               31/12/99   30/09/99
Ordinary Shares                       248.5p     216.5p
Warrants                              149.0p     121.5p

LARGEST  HOLDINGS  (market value £66.6 million  equal  to 64.7% of total
portfolio)
                                               
                                                  % of
31/12/99                             £'000's   portfolio
                                                    
BP Amoco                              8,436       8.2
British Telecom                       5,357       5.2
Vodafone Airtouch                     5,169       5.0
HSBC Holdings                         4,995       4.9
Shell Transport & Trading             4,287       4.2
AstraZeneca                           3,665       3.6
Glaxo Wellcome                        3,428       3.3
United Utilities                      3,109       3.0
Marconi                               2,455       2.4
Carlton Communications                2,316       2.2
Cable & Wireless                      2,184       2.1
SmithKline Beecham                    1,945       1.9
British Aerospace                     1,867       1.8
SIG                                   1,817       1.8
Corus Group                           1,682       1.6
Burmah Castrol                        1,644       1.6
Pearson                               1,619       1.6
Cookson Group                         1,424       1.4
Royal & Sun Alliance                  1,415       1.4
Euromoney Institutional Investor      1,350       1.3
Gerrard Group                         1,337       1.3
Unigate                               1,317       1.3
Marshalls                             1,266       1.2
Lonmin                                1,263       1.2
Rolls-Royce                           1,258       1.2
                                                         
For further information, contact Adrian Frost at Deutsche Asset Management on
020-7545-6000.

For additional copies, changes of address or details of our Private Investors'
Plan  and  low  cost ISA contact Mark Pope on 020-7545-0520,  e-mail  address:
[e-mail]

Issued by Deutsche Equity Income Trust PLC and approved by Deutsche Investment
Trust  Managers  Limited,  regulated by the Investment  Management  Regulatory
Organisation  and  manager  of  Morgan  Grenfell  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.