The lockdowns put in place to slow the spread of coronavirus have brought about an unprecedented demand shock for companies in the most affected industries.
UK income investors have felt the pain
Investors in UK income stocks may feel especially hard hit by the swathe of dividend cuts announced.
This is largely down to the types of companies on the UK market and the nature of some of the income favourites in the FTSE 100.
In 2019, just 15 companies accounted for 64% of UK dividends, and of these six have cut, cancelled or deferred dividends so far this year. Even by April, 45% of UK companies had scrapped payouts.
The UK's overweight showing in energy, financials and materials - and underweight IT stocks, some of which are becoming reliable dividend payers - made for a more pronounced effect on dividends compared to global equities.
Where are the reliable dividend payers?
A wider opportunity set and less sector concentration are possible with a global approach to equity income.
In this way, income-seeking investors can benefit from greater diversification without abandoning dividends and resorting to selling shares for income - a strategy which places them at the mercy of market volatility, as anyone who had to sell shares at the recent market bottom to meet income requirements will attest.
Of course, there is more to ensuring reliable equity income than geographical diversification. Investors reliant on the old equity income approach of selecting the highest-yielding stocks will have seen many of these cut their payouts.
By aiming for dividend growth, rather than the highest yields, investors have a better chance of receiving sustainable, growing income.
They will also be able to access companies beyond the traditional income sectors such as IT and benefit from the superior capital growth in such sectors.
Although it may intuitively seem a good guide when seeking income, a high yield is often a sign of distress in a business - whereas nothing grows dividends like a growing company.
Matthew Page is co-manager of the Guinness Global Equity Income fund