LGIM's Black: Two income 'usual suspects' I am avoiding

Richard Black is avoiding ‘usual suspect' stocks Aviva and Tesco in his L&G UK Equity Income fund over fears their strategies are wrong in the current environment.

Speaking at Investment Week’s Senate Summer Investment Conference in late June, the manager said Aviva is now paying the price for a growth drive that was at odds with the more cautious stance of its rivals. “In 2007, most of the sector were trying to derisk their balance sheet as the financial crisis took hold. Prudential sold its Taiwan business while our parent L&G started generating cash and holding it as a capital buffer. “At the same time, Aviva stood up and said ‘one Aviva twice the value’ and ‘let us go for growth’. The balance sheet has been increasingly leveraged, financial ...