What risks does the commodities slump pose for income investors?

Eric Moore, manager of the Miton Income fund, looks at how major resources companies are responding to price falls.

Some of the biggest changes in global markets over the last 12 months have come in commodity markets. Compared to a year ago, gold is down 15%, copper is down over 25%, sugar is down by a third, iron ore is down over 45% and the oil price has halved. These are massive moves, which have equally massive implications for equity investors.  For starters, 'Dr Copper' and his fellows are suggesting all is not well with aggregate demand, which does not chime with an equity market that remains keen to anticipate a sustained recovery. China is plainly slowing, Western GDP growth is lacklustre,...