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Global Equity Income orientated strategies have been underperforming the wider market for some years now. Indeed, it certainly feels like a long time since an avalanche of research was singing the praises of high yield investing
In the meantime, market leadership has been dominated by a narrow range of growth orientated stocks. Growth has been 'scarce' and therefore highly valued, and its longer 'duration' has benefited from record low bond yields. Most obvious has been the run up in certain technology names.
Are market conditions now favourable for a rotation towards companies with strong balance sheets and higher dividend yields? We think they are, as rising interest rates have often been catalysts for a change in market leadership.
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