Income stocks have 'less to fear'

ON UK INCOME

Newton's Simon Nichols believes opportunities remain in stocks on modest valuations with attractive and growing dividend yields.

Over the last couple of years, equity markets have enjoyed strong returns as stocks have recovered from the financial crisis and interest rates have been held at historical lows. The recovery phase is likely to be in its final throes, mid-cap stocks have outperformed their larger brethren and most valuations are expectant of continued growth. Price strength in the commodity market has been a drag on the relative performance of pure UK equity income funds recently and the bellwether copper price has now surpassed its pre-crisis peak suggests growth must also drive this market in 2011. ...