Newton cuts dividend target on £2.5bn Higher Income fund

Newton is to lower the dividend target on Tineke Frikkee's Newton Higher Income fund in light of a "challenging market environment", as the group also moves to merge a number of its UK equity funds.

The yield requirement on Higher Income will be cut by between 20-25%. Newton said it was taking action as the current environment is characterised by "low returns and low yields across asset classes, which means the current dividend payout is unsustainable." Newton said the fund would aim to remain in the top 10% of income payers in its peer group. "The US Federal Reserve's indication last month that they plan to hold interest rates at near zero through to mid-2013, has reaffirmed our belief that unprecedented low interest rates will remain," said Newton CIO Jeff Munroe. "This r...