Ask the Experts: Equity Income - what are the assurances?


Question: Equity Income Funds have suffered over the past year thanks to the dividends cut by UK companies. What assurances can the panel give me that Equities have ridden out the storm and are once again an attractive alternatives to over sea funds?

Answer: Leigh Himsworth - Gartmore I don't believe it is the case that the performance of UK equity funds is attributable to dividend cuts. I believe the underperformance of UK equity income funds in general is more to do with the fact that the rally in the stock market has been dominated by highly indebted, cyclical stocks. These stocks have benefited from both the monetary stimulus measures and low interest rates. During the rally, we have found that many good quality companies i.e. those with stable earnings, strong cash flows, low debt and operating in less cyclical areas of the ...

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