Reserve to preserve

Even with a difficult financial year ahead, closed-ended equity income funds can still provide a steady source of sustainable and growing income

One of the most commonly held views by investment professionals today is that corporate earnings and therefore dividends from the UK stock market are under pressure and are likely to be cut during 2009. Individual companies are anxious to reduce costs, preserve capital and in some cases lessen indebtedness. One of the easiest actions to take is to cut the dividend paid to equity shareholders. In the meantime, interest rates have fallen in the attempt to prevent a deep economic slump becoming something much worse. Investors requiring a yield are therefore at serious risk of earning nothing...