Angry workers and tax-hungry governments pose the biggest risks to equity income investors, Henderson Global Investors' Ben Lofthouse has said.
The co-manager of the group's £679m Global Equity Income fund said the sector could be hit by further pressure on banks - taxpayer-owned banks in particular could be told to reduce or scrap dividends - or indirectly, as the government bows to pressure to increase taxes.
Dividend-paying sectors like telecommunications, utilities and food producers, could also be forced to pay higher corporate taxes, for example.
“There is little growth economically and wage inflation is subdued. This has been good for corporates, but in the meantime people are feeling a bit stretched. The UK government is still struggling to close that deficit gap," he said.
“The longer growth takes to come through, the more they will be looking at alternative ways to raise money and the more social unrest you will get. These two factors are not separate."
With the economy healing but by no means firing on all cylinders, Lofthouse said an outside event - such as an oil price shock - could spark outcry.
“If oil was to go up significantly you would probably have people on the streets saying, ‘Our salaries have not gone up enough.’ These are political risks. The tax issue is quite real.”
A number of UK equity income managers have reduced their positions in Lloyds Banking Group as a result of ongoing political issues, with the bank hit with a longer than expected delay in the restarting of its dividend payments.
Meanwhile, utilities continue to dominate the political agenda, with Labour leader Ed Miliband pledging to freeze energy prices if he gets into power next year.
Strong sterling may also curb dividend growth this year, according to Lofthouse, who expects 2014 global dividend growth of 6% for sterling investors, compared to 8% for those invested in dollar-denominated assets.
He has steadily reduced exposure to Europe over the past six months, in order to increase holdings in the Asia Pacific region, particularly China. He said: “There is still 6-7% income growth. Wages are going up. There is still a middle class emerging. In the longer-term, we will find interesting companies that have exposure to a faster growing income there.”
He has also been reducing his exposure to the financial sector, because of the “tough” low interest rate environment, especially in Europe. He said: “At one point financials were just too cheap. Then they re-rated. Now they are cheap but there’s not much sign of earnings growth.”