Trustnet Magazine Issue 15 February 2016 | Page 24

IN THE BACK

STOCKS

AVIVA
MULTI STRATEGY
TARGET INCOME

ADDITIONS
James Henderson says the benefits of holding stocks
that pay a special dividend are not confined to income

S

pecial dividends are becoming a popular feature of the UK equity
market. They are of course very helpful to UK managers of equity
income funds, especially as dividend cuts from major companies as
varied as Tesco, Centrica and Glencore come through. However, special
dividends are also important in establishing real management discipline.
Companies can behave like individuals if they have excess cash and
find a way of spending it badly – it is best spent when there is a degree
of tension and the spending really m ]\