The outlook for UK dividends is not good, with a number already having cut or suspended their dividends, as this week’s cover feature, starting on page 32, reports. And a problem for years has been that the UK dividend haul largely relies on a handful of big payers, including in sectors such as oil and gas, which are now under pressure for reasons including travel bans and falls in the oil price. If just one of these cut their dividends it could have a serious effect on the overall level of UK dividends.
Diversified source of income
Strong total returns
Defensive profile
Good manager record
Can lag in rising markets
So if you are seeking an income from your investments, now more than ever it is crucial to diversify your sources of it. One way to do this is to hold a global equity income fund such as Troy Trojan Global Income (GB00BD82KQ40). This fund searches across the world for dividends, so has far more scope than a UK equity income fund to search for companies that may not be as badly affected by the current situation.