Why global firms are better positioned to pay dividends

EQUITY INCOME

Peter Hewitt, manager of F&C Managed Portfolio Trust, explains why investors in search of equity income are finding better opportunities in companies that do most of their business overseas.

With UK interest rates still at rock bottom and gilt yields not much better, investors in search of income are having to look beyond the ‘risk-free’ to achieve their aims. In fact, persistently high inflation means ‘risk-free’ is something of a misnomer, as real returns on these assets are frequently negative. But while choices for cash and bond investors may be limited, those in search of equity income are finding a world of opportunity opening up beyond the shores of the UK, as companies in markets around the globe cotton on to the idea of rewarding their shareholders with dividends. ...