Can the structure of a fund boost income returns?

INVESTMENT TRUSTS

James Saunders Watson, head of marketing, investment trusts at J.P. Morgan Asset Management, looks at the relationship between fund structure and dividend income.

With bank interest rates stuck near zero for nearly four years now, and yields on UK government bonds in similar territory, investors in search of an income stream have seen many of their traditional sources dry up. At the same time, the economic recession has made many companies more conservative. In uncertain times it can be hard to commit to decisions on big capital spending projects like building new factories. Despite the poor economic backdrop, corporate earnings have held up well, meaning many are now sitting on significant cash piles. This cash could be deployed in mergers a...