Colin Morton, lead manager of Franklin Templeton's £504m UK Equity Income fund, has reduced the fund's exposure to utilities after taking a hit from investing in the sector, which is facing mounting political risks.
Morton identified the UK government's plans to impose a price cap on the sector as well as the resurgence of the Labour Party under current leader Jeremy Corbyn as the two key political headwinds for utilities. RLAM UK equities trio: Where next for UK equities? He said: "One of the areas that has hit me quite hard in recent months, even though we did take some evasive action, has been utilities." Morton said he previously had a reasonable position in utilities because "they have good dividend yields and tend to be RPI-protected [for example]", but he has reduced this weighting sign...
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