Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
A change in the macro landscape could herald a new era for equity income investing, as higher interest rates imply a totally different environment to the past decade. High interest rates are creating a more difficult funding environment for growth companies, whilst bringing the benefits of cash generation within a business into greater focus. Additionally, valuations in equity income sectors are often undemanding, to say the least, which we think creates an attractive setup for the years ahead. In a recent strategy note, we flagged the disappointing returns to cash after inflation over the past two years, and here we dig into the potential of equity income as an alternative.
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