Whitehead warns of high income concentration risk in UK equities

10 companies account for 60% of all dividend income, as concentration worsens

UK Equity income investors face unacceptably high concentrations of risk, with just 10 companies paying 60% of all dividend income, according to Sarasin & Partners. Mark Whitehead, manager of Sarasin’s £150.5m International Equity Income fund, says: “It is increasingly risky just holding UK equities, and a lot of UK equity income funds are having to invest up to 40% of assets in just eight stocks.” The best 10 dividend payers provide 59% of all UK dividend income, compared to about 25% in each of the US and Japan, and 30% in Europe. Guy Monson, Sarasin’s chief investment investor, ...