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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.

23/05/2016

Nick Kirrage

Nick Kirrage

Fund Manager, Equity Value

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.

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