Concentration fears as UK weightings in global income funds hit three-year high

Concentration fears as UK weightings in global income funds hit three-year high

Investors are being urged to carry out extra due diligence on global equity income funds on fears of 'disproportionately rising stock risk', as the sector's average exposure to UK-listed names reaches a three-year high.

Five years ago, there were just 15 global equity income funds, but this has more than doubled to 37 as investors' search for yield widens outside the traditional stronghold of the domestic market. Many investors were hoping to diversify their income portfolios away from the highly concentrated UK market; where 63% of dividends comes from just 15 companies. However, analysis of funds within the IA Global Equity Income sector reveals exposure to UK-listed companies is currently at a three-year high of 21%, having been as low as 14% in 2013. This 'low' is still double the MSCI AC World b...

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