M&G's Rhodes puts five stocks on watch ahead of dividend cuts

M&G's Stuart Rhodes is poised to drop a handful of stocks from his £1.1bn M&G Global Dividend fund in the expectation they are set to cut their dividend.

Rhodes said 5% of his fund consists of stocks he is intending to sell once the companies' valuations reach an attractive level. He named Inchcape, AXA, Bluescope Steel, Diamond Offshore and Souza Cruz as key examples. Rhodes has targeted automotive retail and services company Inchcape over concerns over its recovery from a severe restructuring period during the financial crisis. Life and insurance giant AXA is particularly sensitive to European market crises and has cut its dividend by a significant amount, he added. US rig business Diamond Offshore is on the watch list because it was...