Schroders' Hudson: Banks among 'most interesting' sectors for income investors

Matt Hudson, manager of the £694m Schroder UK Alpha Income fund, has increased his weighting to banks, despite industry concerns about the threat to dividends from the record level of regulatory fines imposed recently.

The manager (pictured), who has been at the helm of the fund for a decade, has been running an overweight in financials for the past few years, and is now adding to his position in the banking sector. Barclays, HSBC and Lloyds Banking Group are all in the fund's top ten holdings, at 3.9%, 3.8% and 3.7% of total assets, respectively. "I think banks are now one of the most interesting areas [for income investing]," the manager said. "They are turning into a set of assets with a much better capital position and a better understanding of risks." Hudson said he is not as concerned as so...