In contrast, Mr Moore stresses that mid- and small-cap stocks in consumer-facing sectors such as housebuilders and retailers are offering rapid rises in their dividends. “In the FTSE 250, dividends are growing in line with company earnings, and there is an exciting range of UK domestic stocks,” he adds. “The key isn’t a high starting yield but rapid dividend growth to [reflect] underlying company growth.”
Harriet Meyer is a freelance journalist
EXPERT FUND PICKS
Rathbone Income
Managed by Carl Stick, this £1.1bn fund invests in small-, mid- and large-sized UK equities with a focus on dividend-paying stocks trading at a discount to fair value. It has recently also made use of the ability to invest up to 20 per cent in foreign equities. The largest sector allocation is to financials at 19.3 per cent.
Artemis Global Income
This £2.4bn fund is managed by Jacob de Tusch-Lec, with Frederik Lerche-Lerchenborg as analyst. The portfolio will mainly invest in global equities but may have exposures to fixed interest securities. The largest geographical weighting is to Europe ex UK at 43.1 per cent, while the largest sector allocation is to financials at 29.8 per cent of the portfolio.
Standard Life Investments Global Equity Income
Managed by Kevin Troup since January 2012, this £111m fund typically holds a concentrated portfolio of stocks and may also hold a proportion in government, corporate and other bonds. The largest geographical weighting is to the US at 40.1 per cent.
Standard Life Investments UK Equity Income Unconstrained
This £1bn fund is a member of the Investment Adviser 100 Club 2015 and has been managed by Thomas Moore since 2009. Adopting an unconstrained approach, the fund typically holds a concentrated portfolio of stocks and may also hold a proportion in bonds. As of August 31, the portfolio held 43 per cent in FTSE 250 stocks, with a further 40.8 per cent in FTSE 100 companies.
