60 seconds on the hunt for value in UK dividends
As the demand for UK dividends grows we look at why investors need to be brave in order to generate income higher than the market average.
The UK equity market is seen as an income generator and everybody wants income. But when everybody wants something, it becomes expensive.
The number of stocks in the UK market that yield more than the market itself is now at 30-year lows.
High yield only for the few
The dividend yield for the UK market as a whole looks reasonable, but that is being elevated by a handful of very, very high yielding stocks. The rest of the market on average tends to yield a much lower level.
This makes it harder for income fund managers to find good ideas, which should focus income funds to look at some of the bigger companies, where fund managers have to be braver. This is where we are focusing today to generate income for our clients.
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.