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Equity Income Guide
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Objectives
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UK Equity Fund Objectives
The UK market features companies with many different characteristics. One popular way of categorising companies
(and funds) is into those aiming to provide capital growth and those seeking to generate a regular income.
Growth companies – These institutions typically fund their expansion by ploughing their profits back
into the business by opening new offices, building factories, developing new products and so on. The investment return that
these companies provide comes largely from changes in the share price, hence they seek to provide capital appreciation as
a means to attract investors.
Income generating companies – these types of companies typically opt to distribute most of their profits to
shareholders in the form of dividends. These higher yielding companies also aim to grow their dividends over time.
When investing in these companies, the return comes from two sources: changes in the share price plus dividends.
Higher yielding companies tend to be more mature and often operate in industries with highly predictable revenues, such
as utilities. These factors help them to pay high and rising dividends.
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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.
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