Amid an ever-volatile market landscape, Jaisal Pastakia, investment manager at Heartwood Investment Management, looks at the five things income investors should learn from the coronavirus outbreak.
It has been a challenging few years for investors looking to draw income from financial markets.
Amid a multi-year trend of low yields in bond markets, and investor disinterest in dividend-paying shares in stock markets, 2020's economic crash led to the sharpest cuts to global dividends in history (see chart in gallery above).
Following the worst of March's market falls, companies were placed under intense regulatory and political pressure to abort payouts to shareholders, meaning that even some shares which had already traded through their 'ex-dividend' dates (typically the point of no return for delivering on promised payouts) saw investor payments cancelled.
The word 'unprecedented' has been used to excess in recent months, but the situation for income investors is genuinely unparalleled.
Indeed, emerging unscathed from the global pandemic crisis is a sadly unlikely scenario for any income-oriented investment portfolio.
Still, as highly active asset managers, and aware that many of our clients rely on the income they draw from their portfolios, we were at least able to mitigate some of the potential fall in income distributions.
Five key moves helped us to weather the storm - see the gallery above to find out what they were.