The case for US equity income

Investors should be focusing on stocks with high and growing dividends, writes Henry Sanders III, manager of the Aviva Investors US Equity Income fund.

The ongoing improvement in the health of the US economy, low interest rates and a cheap dollar continue to propel US equities higher. However, a rising oil price, the end of quantitative easing and the prospect of greater fiscal austerity could provide enough headwinds to stall the advance and introduce greater volatility to market returns. Amid that mixed environment, and after two years of rapid improvement, it is likely that US company earnings growth could slow to levels closer to trend rates. Earnings have increased by close to 100% year on year as the economic recovery has taken ho...