RLAM's Cholwill: Miners like Rio Tinto have 'survivor bias' qualities

For income investors, a theme in 2015 was the number of dividend cuts among large- and mid-cap companies, writes Royal London Asset Management's Martin Cholwill.

Oil exploration, oil service, and a range of mining stocks, such as Glencore and Anglo American, also cut pay-outs. Many of these companies are stalwarts of equity income funds. Lots of these companies have something in common, stretched balance sheets and a lack of sustainable underlying cashflow to back their dividend. When one reflects on the fundamentals of the stocks listed above, perhaps investors should not have been so surprised by the dividend cuts, although the fall in their share prices following these cuts suggests otherwise. The mining sector is an interesting example;...