S&P Fund Services warns of clustering in the UK equity income sector
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S&P Fund Services has warned of an overlap of top holdings in the UK equity income sector.
The research group says the “clustering” concerns have been endorsed by a number of managers, citing the likes of Jupiter income manager Tony Nutt.
S&P has found that 22 of the 23 funds it rates in the UK equity income sector now have Vodafone among its top 10 holdings. While the likes of GlaxoSmithKline and Royal Dutch Shell appears in 87 per cent and 78 per cent of those funds respectively.
S&P Fund Services analyst Peter Brunt says: “The absence of banks from investors’ dividend radar now means that over 66 per cent of the UK market dividend is provided by just 15 companies.
“Obviously these are very large capitalisation companies and we have not taken either the size of each fund or of each individual position into account, but it does highlight the potential crowding of certain stocks within the sector.”
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