Investors must avoid UK equity value traps looking for income

ON UK INCOME

The Co-operative Asset Management's Andrew Moffat says UK equity investors should not chase dividend yield at the expense of long-term returns.

For most investors, a well-managed income fund remains a bedrock. A mix of capital return and dividend income can over time deliver a tidy return. History has taught us dividends play a crucial role in the total return investors receive from investing in equities. As the outlook for dividends is closely tied to the improving prospects for the global economy the next few years could provide a happy hunting ground for income investors. It is notable that a number of companies have re-established dividend payments such as mining companies Rio Tinto and Anglo American. Their balance sheet...