There was a direct correlation between the worst-performing UK equity income funds during the recent sell-off and those with the highest dividend concentration risk, claims Neptune CEO Robin Geffen.
According to Geffen, who used Morningstar data, the average bottom quartile fund in the IA UK Equity Income sector during the Q1 market sell-off relies on its top ten holdings for 51.47% of its yield generation. During the correction between 29 January and 5 February, the IA UK Equity Income sector average was down 3.9% while the FTSE 100 dropped 4.4% and the FTSE All-Share fell 4.3%. "Importantly, and somewhat uncomfortably for many income investors, traditional FTSE 100 income stocks were some of the hardest hit during the sell-off," Geffen said. 'It wasn't the outcome we hoped ...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
