Standing up to market challenges

David Smith, Portfolio Manager of Henderson High Income Trust, discusses the factors currently affecting the UK market, navigating concentration risk, and how consumers and businesses are dealing with rising costs. David also highlights why bonds are essential for diversification and provides his outlook for UK dividends.

Key takeaways:

• Despite the increased volatility in global equity markets, the UK market has been fairly resilient largely supported by solid performance from the mining and oil & gas sectors which have benefitted from surging commodity prices.
• Our ability to own bonds was beneficial from a diversification perspective since bond coupons are typically more resilient compared to equity dividends in big drawdowns or economic recessions. Though our bond exposure has been near historic lows, we’ve started allocating away from equities and into bonds.
• With consumers under pressure from the cost-of-living crisis, businesses that have set up their operations to be the low-cost leader can provide consumers with good value for money and could stand to benefit in this difficult market environment.

Catch up on previous episodes of Trust Radio