Dividends were slashed as Covid hit but now UK equity income funds and trusts are tipped for a rebound.
Funds investing in UK companies attracted £295m in July as the outlook for dividend payments continued to strengthen, the latest figures from the Investment Association reveal.
Investors should broaden their hunt for income to Britain’s junior stock market, where dividends are growing twice as fast as those paid by London’s larger listed companies, experts have said.
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Despite having less financial flexibility than their main market peers, AIM dividend payers were no more likely to cut payouts during the first year of the pandemic and have been rebounding strongly since the second quarter of 2021.
Mark Slater co-founded Slater Investments, a specialist UK equity fund manager, in 1994. The company manages a hedge fund, two unit trusts, two open-ended investment companies, and segregated portfolios for pension funds and high-net-worth individuals.
Despite uncertainties surrounding Covid-19, the UK economy is projected to deliver significant GDP growth over the next five years and should find itself among the fastest growing European countries, underpinned by strong consumer spending trends.