Mr Kirrage’s penchant for unloved stocks capable of growing dividends has seen him develop a soft spot for businesses that have just slashed their payouts.
“They are rarely welcomed by investors, so when companies do cut their dividends their share prices tend to fall significantly as a result,” he says. “However, history shows that over time share prices recover and dividends grow much faster than the market expects.”
If waiting on troubled dividend slashers to potentially restore their payouts doesn’t appeal, it is clear that yield-hungry investors might want to consider exploring fixed-income opportunities outside of the UK.
Ultimately, having a good mix of fixed income, equity income and other forms of income-generating investment is the best way to maintain a fund that will provide yield from a variety of sources, as well as diversifying the risk across sectors, asset classes, risk and geographies.
Daniel Liberto is a freelance financial journalist
