Internationally tilted portfolios are likely to render better returns

UK INCOME

Income seekers who abandoned savings deposits in favour of financial markets and bought UK equity income funds this time last year have seen exceptional returns.

Over the last year to end of April 2010, the average UK equity income fund delivered a 30.68% return, which are quite exceptional figures. Looking ahead, an increasing problem for the UK equity income sector is that of clustering, with 10 companies producing nearly 60% of the UK markets’ total dividend income. As a result, many UK funds have similar portfolios, and as such, differentiation is crucial. However, we believe there is a large and varied range of UK companies with exposure to both developed and emerging overseas markets where dividend yields and dividend growth rates are hi...