Retirees and investors who draw a regular income from their investments often focus on UK equity income. But if too much of your income comes from a small number of holdings, you could be at risk of a fall in your income if one of them fails to pay dividends.
Strong total returns
Investing in equity income funds outside the UK can help to mitigate this risk. Asian equity funds are a particularly good solution because this region’s predominantly young population is getting richer, and economies that used to be dominated by commodities and export manufacturing are diversifying. Also, increasing numbers of Asian companies now pay dividends and have the resources to support wider growth.