Advisers are increasingly looking outside the UK for income fund opportunities this year, new SWIP research reveals.
The survey of 201 advisers found while 79% expect to invest in UK income vehicles in 2008, 37% will dabble in European offerings and 17% will look to the Far East.
A third of advisers already investing in Europe also expect to boost income exposure this year.
As dividends increase in continental Europe, SWIP says it natural to expect IFAs to seek income outside of the UK.
SWIP European equities head Steven Maxwell says a “cultural shift” in dividend policy is driving European opportunities.
“Dividends in continental Europe have been growing at a faster rate to the UK and, by adding a European income fund to their existing UK income exposure, investors can benefit from greater diversification and therefore reduced risk,” he says.
The SWIP research revealed just 7% of advisers will not invest in income funds this year, but almost a third intend to decrease risk for income-invested clients.
“It is positive to see that advisers are looking to spread their income investments this year and are recognising the increased opportunities for income generation outside the UK,” Maxwell says.
“Given the levels of yield-growth at present in mainland Europe and beyond, we expect to see an increasing trend of income diversification over the next few years.”
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