Henderson's Smith: Why I swapped high yield for dividend growth

Equity income strategies are set to remain in favour but dividend growth rather than headline yield is becoming increasingly important, according to Henderson High Income's David Smith.

The manager (pictured), who took over the £200m trust 18 months ago, said he has switched the portfolio's focus from "income protection" to dividend growth in a bid to better capitalise on the attractions of UK equity income. Smith said that the trust's previous strategy had failed to perform, prompting him to look at a more growth-oriented approach.  He said: "We have taken out high-yielding stocks and added in those which have the potential for dividend growth.  "We reduced our overweight in utilities, with the exception of protected assets such as water, and added in media compa...