6 Ways to Beat the Dividend Drought

Life is tough for UK equity income managers with dividend cuts coming thick and fast. We find out how three Silver-rated fund managers are handling the crisis

James Gard 23 April, 2020 | 9:08AM

Notes

Few fund managers emerged unscathed from the March sell-off and those with an equity income remit are no exception. The sector was the second weakest Morningstar category in the first quarter, with funds in the group down an average of 28%; only UK mid-cap equity put in a worse performance (down 33%).

UK equity income managers have faced the double whammy of falling share prices for the companies they invest in and a loss of dividend income. Estimates by Link suggest total UK dividend income payouts will fall from £100 billion in 2019 to less than £50 billion in 2020. Already, banks have been forced by regulators to scrap their payouts and more companies are expected to cut dividends as the economic impact of the lockdown kicks in over the coming weeks and months.

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About Author

James Gard  is content editor for Morningstar.co.uk

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