You are here: Home - Saving & Banking - News -

Santander issues equity income outlook

0
Written by:
08/01/2008

Santander UK Equity Income Fund has published its forecast for 2008 and revealed that it favour larger companies, especially the mega caps, as they continue to look attractive.

This appeal is driven by stable earnings prospects, strong balance sheets and growing dividends at attractive initial yields.

Hak Salih, manager of the fund, said: “Given the weaker outlook for the UK economy combined with interest rate cuts it is likely that we will see a period of Sterling weakness both against the Dollar and the Euro.

“Considering the large exposure to overseas earnings of the FTSE constituents, this is another reason for the preference for larger caps in the UK. Mid and small caps in general remain unattractive due to their larger domestic and consumer exposure. However, as always in a market shakeout with indiscriminate selling there will be attractively priced opportunities for us to increase our exposure to these areas as the year pans out.”

Santander says that the softer outlook for global growth means it has significantly reduced its exposure to the mining sector compared to last summer’s overweight position against the income sector. The significant re-rating of the sector has left most valuations unattractive given the softening outlook for global commodities demand. However, significant corporate activity is the last story to play out in this sector and its remaining exposure plays to this theme.

Salih added: “Although prospects for the equity market in the next 12 months look unexciting we believe that we are unlikely to see the significant underperformance of the income sector that we saw last year. Instead, with falling interest rates and a positive outlook for higher yielding larger caps, we believe the income sector should be well placed for 2008.”

 

Related Posts

Tagged:

Tag Box

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:
Emerging markets outperform in 2007

The best performing funds of 2007 invested in emerging markets, according to Dr Richard Ramyar, head of research at Lipper,...

Close