Should income hunters look to large caps?

ON UK INCOME

Given the stellar performance of small and mid-caps, the opportunities for income investors are shifting to the larger end of the market, argues Cazenove's Matt Hudson.

The UK economy has entered 2014 in the best position for years. Business activity indicators are well into expansionary territory, unemployment is falling, GDP growth is accelerating and inflation is surprising on the downside. The economic underperformance of a few years ago is now reversing with estimates suggesting the UK could be the fastest growing economy in the G7. Naturally, the Chancellor of the Exchequer George Osborne is using these datapoints as encouragement for his austerity project. As the general election draws nearer we can expect increased political debate over the b...