You are here: Home - Investing - Experienced Investor - News -

A stock to top up…and one to reduce – Income fund manager gives his views

0
Written by:
16/12/2015
Fund manager Stephen Message, of Old Mutual UK Equity Income, gives his thoughts on a stock to top up, and one to pare back.

Top up – Aviva

We have been adding to our position in insurance business Aviva given the recent weakness in the share price and in our view an attractive prospective dividend yield. Following a dividend cut and change of leadership in 2013, the company is undergoing a rationalisation programme in order to improve returns and cash flows. This should result in sustainable dividend growth in the future.

In some ways we believe Aviva can start to emulate what has been achieved at fellow insurer Legal & General, where an increased focus on cash generation has led to significant dividend growth over the past several years. Additionally, the company also merged with Friends Life Group earlier this year and we see scope for meaningful cost savings to be delivered to further support profit growth as the business is integrated. Aviva remains a top 5 position in the portfolio.

Reduce – DS Smith

One position we have recently taken some profits in is paper and packaging group DS Smith. The management team has been instrumental in improving returns at the business, in part driven by the successful integration of a series of acquisitions, which included SCA Packaging in 2012. Consequently investors have enjoyed a growing dividend stream where we see scope for further growth in the future. However, given the strong performance of the shares this year we felt it prudent to recycle some of these profits into positions that have lagged, but we still retain a holding.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
recruitment
UK unemployment rate falls to near 10-year low

The UK unemployment rate fell to 5.2% in the three months to October, the lowest for nearly ten years.

Close