Schroder income duo back embattled UK supermarkets despite dividend cuts

Nick Kirrage has begun adding supermarkets to the £1.5bn Schroder Income fund he co-manages with Kevin Murphy, expecting a significant boost to dividends in the long term.

The manager has initiated small positions in Tesco, Sainsbury's, and Morrisons, despite the continued struggles in the highly competitive food retail space, and the investigation into Tesco's recent £263m accounting error. At current valuations, supermarkets are an attractive investment in future dividend growth, the manager said. Year to date, the share prices of Tesco, Sainsbury's and Morrisons have fallen 43%, 28% and 34%, respectively. In its latest set of results, Sainsbury's said it would likely cut its end of year dividend to fund cheaper prices in the battle for customers, ...