Even taking into account the recent correction, the defensive rally earlier this year has made premium income opportunities harder to find, especially when balanced against valuation.
Though we do not think UK equities are overvalued as a whole, share price moves in some instances are not yet supported by underlying earnings growth. However, there are interesting opportunities to be found for those who are willing and able to look at different parts of the market. The cyclical nature of miners usually precludes them from inclusion in income portfolios; however, after significant underperformance this year, their valuations look attractive on simple metrics and, in some cases, dividend yields are at a premium to the market. An example of the latter would be BHP Bill...
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