Monthly Report

Deutsche Equity Income Trust PLC
09 August 2002



                          Deutsche Equity Income Trust

                       REPORT FOR THE MONTH OF JULY 2002



MARKET BACKGROUND

The UK equity market as measured by the FTSE All-Share index fell by 9.4% in
capital terms over the month, an even bigger fall than in June and close to the
9.6% fall in the market last September. Our net asset value per share fell by
9.9% but the share price fell by 8.2% over the same period as the shares moved
from close to parity to a 1.9 premium.

The market was weak across the board, with nearly all sectors down over the
month. One minor positive was the modest outperformance of the FTSE 350 Higher
Yield index (which fell by 8.9% in capital terms) against the FTSE 350 Lower
Yield index (which fell by 9.8%). However, there was significant divergence
across the market, with the FTSE 100 index (which fell by 8.8% in capital terms)
outperforming both the FTSE 250 index (which fell by 13.0%) and the FTSE Small
Cap index (which fell by 10.8%) due to the high exposure of the FTSE 100 index
to the best performing sectors of Household Goods, Telecoms, Tobacco and Banks.
The worst performing sectors were the 'cyclical' areas of Steels & Other Metals,
Electronics & Electrical Equipment and Mining, as well as the Insurance sector.

Our purchases included buying new holdings in De La Rue and Meggitt as well as
adding to existing holdings in Shell. Holdings were sold in Diageo, Lonmin and
A. B. Ports.

OUTLOOK

Investor confidence has been hit by a combination of accounting concerns and
softer economic data, as well as continuing tension in the Middle East. A quick
resolution to the geopolitical situation looks unlikely but, as far as
accounting is concerned, recent scandals have once again raised questions about
the over-reliance of the investment community on the use of earnings per share
and price/earnings ratios as the key measure for valuing companies. Our
preferred methodology for analysing and valuing companies remains cash flow
return on investment (CFROI), and we continue to look closely at cash flow
statements to see whether companies appear to be flattering reported profits. In
addition, the softer economic data in the US and UK should allow the monetary
authorities to further reduce interest rates, particularly as there are signs
that the booming UK housing market is running out of steam and underlying
inflation ex-housing is below the Chancellor's guidelines.

We therefore believe that valuations of UK equities are looking increasingly
attractive at current depressed levels and are cautiously optimistic of a market
recovery.



                                                                                 31/07/02               30/06/02

NET ASSET VALUE                                                                   210.1p                 233.2p


MID-MARKET SHARE PRICE                                                           31/07/02               30/06/02

Ordinary Shares                                                                   214.0p                 233.0p

Dividend Yield (%)                                                                  3.5                    3.2


LARGEST HOLDINGS (market value £57.0 million equal to 68.1% of total portfolio)



                                                                                         £'000's     % of portfolio

BP                                                                                         6,905           8.2

GlaxoSmithKline                                                                            5,850           7.0

HSBC Holdings                                                                              5,081           6.1

Royal Bank of Scotland                                                                     4,212           5.0

AstraZeneca                                                                                3,554           4.2

Shell Transport & Trading                                                                  2,927           3.5

Barclays                                                                                   2,585           3.1

HBOS                                                                                       2,383           2.8

Vodafone Group                                                                             1,923           2.3

Imperial Tobacco                                                                           1,913           2.3

Lloyds TSB                                                                                 1,909           2.3

Lattice Group                                                                              1,711           2.1

Forth Ports                                                                                1,687           2.0

Centrica                                                                                   1,596           1.9

BT Group                                                                                   1,593           1.9

Prudential                                                                                 1,351           1.6

Legal & General                                                                            1,279           1.5

Canary Wharf Group                                                                         1,277           1.5

Scottish & Southern Energy                                                                 1,272           1.5

Morrison(W)Supermarket                                                                     1,254           1.5

3i Group                                                                                   1,079           1.3

Viridian Group                                                                               944           1.2

Bunzl                                                                                        920           1.1

Tate & Lyle                                                                                  913           1.1

Arriva                                                                                       911           1.1




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.




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            The company news service from the London Stock Exchange