UK Equity Income Less Attractive
Published / Last Updated on 08/05/2010
UK Equity Income Less Attractive
by Ashley Clark, Director
The UK, the traditional home for equity income investors, may not meet long-run requirements and why a global fund may offer greater opportunities for income, growth and diversification.
Income investors need to retain the real value of their capital and income and the best way to do this was through income – this is not being delivered in UK orientated equity investing.
A global equity income approach offers real growth, more predictable returns and long-term out performance.
An exclusive high yield focus was dangerous and could lead to an erosion of purchasing power and capital value with deteriorating fundamentals.
We suggest that “Global” funds will target above average yield for the portfolio as a whole and make individual stock yields a secondary consideration. In addition, look for funds with 20% of its investments in the UK to minimise the currency risk, with another 20% in emerging markets and up to 30% in North America and the balance in Japan.
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