Concentration risk: Where to look outside the UK for yield

Cyclical UK market

One of the recurring problems UK income investors face by owning stocks in their home market is the cyclical nature of many of the key dividend payers.

In a market where ten stocks generate more than 50% of the total dividends paid by the FTSE All Share, there is plenty of concentration for risk-facing investors. Energy, healthcare, tobacco and mining stocks are dominant in the UK and that presents potential problems in the current environment. Companies such as BP and Shell continue to be clouded by the amount they are paying out in dividends compared to how much they are investing to drive future growth. Gallery: The UK's 12 most-shorted stocks The oil majors are back in favour now following the recent jump in the oil price, ...