Stock selection
Ben Peters, who runs the Evenlode Global Income fund, says a bond portfolio tends to have assets with different durations to maturity, so he likes the dividend-paying equities he owns to be at “different levels of maturity, as generally speaking companies that are more established are more likely to pay out a lot of their income in dividends, but you also need growing companies that have the capacity to increase their dividends in future”.
He says one of the challenges with owning some of the most mature companies is that while the yields are potentially very high, there is a risk that lack of growth from those companies risks future dividend cuts.
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David Thorpe is investment editor at FT Adviser
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