“I expect Lloyds to be paying a high level of dividend going forward – today the yield is reasonably token but the capital ratios of that bank are extremely strong.
“They are already talking about the potential for special dividends and share buybacks which shows this is a bank which is increasingly becoming over capitalised.”
And he’s not the only high-profile UK equity fund manager to take a renewed interest in the sector. For example, Old Mutual’s Richard Buxton also holds Lloyds, HSBC and Barclays as top-10 positions in his UK Alpha Fund.
From a global perspective, James Davidson of JPM Global Equity Income Fund has recently moved to over a third of his portfolio, at the expense of utilities stocks where he holds no exposure.
Could banks really be the new go-to income stocks? Let us know your thoughts.
