In the wake of Vodafone’s significant dividend cut this week, leading fund managers explain why it is crucial to diversify your income portfolio and avoid potential mis-haps.
Small and mid-cap gems
Ken Wotton, manager of LF Gresham House UK Multi Cap Income fund, noted that many UK equity income strategies are disproportionately invested in a relatively small number of mega-cap stocks.
“However, this herding has created an opportunity for managers willing to go beyond the status quo,”
When it comes to opportunities in the small and mid-cap space, he is spotting numerous under-researched and under-the-radar companies with the potential for dividend growth over the coming years.
“These stocks are also typically trading at a valuation discount to larger, more well-known peers,” he said.
Gresham House plc (LON:GHE) is an AIM quoted specialist asset manager providing funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies.