How to combat stock specific risk

STRATEGY

The popularity of global equity income is a concern to some investors who are wary of chasing the latest investment fad.

Dan Roberts, portfolio manager at Fidelity, explains the reasons why the strategy is likely to stand the test of time. Income strategies are well represented within UK equity mutual fund asset base with close to £57bn invested across the sector. There are good reasons for this: UK investors understand the importance of dividends as a component of total return; the UK market is home to some world-class businesses and a strong dividend culture – offering arguably the best balance of payout vs. progression; and the sector is also home to some of the longest serving and best performing fund ...