Which sectors are driving the UK economy?

With 55% of FTSE 100 dividends forecast to come from just ten companies in 2018, it is not surprising many UK equity income strategies are disproportionately invested in a relatively small number of large-cap stocks.

This bias towards these high-yielding large-cap names has led to high levels of overlap and correlation within funds in the IA UK Equity Income sector. However, away from the large-cap area of the market, we see a raft of smaller, less well-known companies with the potential to generate meaningful dividend growth over the coming years.  In fact, as political uncertainty continues to hover over the UK equity market, many smaller companies are thriving against larger, more cyclical peers. While large-cap businesses typically are heavily impacted by macro factors, stocks in the smalle...