When inflation is on the rise, nominal assets such as Cash and traditional Bonds (Gilts and Corporate Bonds), lose their real (inflation-adjusted) value.
The face value of the coupon they pay every 6 months, and the promise to repay the holder a face value of £100 in 10, 20 or 30 years time, looks increasingly less valuable than the paper its written on. Bonds and Cash cannot adjust for inflation. That’s why a £5 note buys you less than it did 10 or twenty years ago. 
When it comes to selecting building blocks for the construction of a diversified portfolio, equity income funds are worthy of investors’ attention. There are a number of ways to invest for income: cash (via a savings account), money market funds and bonds, to name a few. But equity income strategies can potentially offer higher returns than other income investments by accepting volatility associated with equity risk.
Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
For latest UK Equity Income index factsheet click here
Equities have recovered strongly from the tariff shock earlier in the year. Dollar weakness vs Sterling has weighed on the relative performance of US equities; however, this was a step-change and there are concerns for Sterling too. Gold has continued to perform very strongly on the “debasement trade” and Central Bank buying. Within Bonds, Emerging Markets are in better shape than Developed Markets, in our view.
Read more to watch The UK's largest dividend payers: a systematic approach to UK Equity Income with Henry Cobbe, CFA and Robert Davies.
At Elston Consulting, we design investment solutions delivered as portfolios, funds and indices for our financial adviser, investment manager and fund provider clients. In the same way that advisers need to think about their target market of retail customers, we as a co-manufacturer need to think about our target market of UK financial advisers. Target market research and testing forms an important part of our solutions design process to ensure what we develop is helpful to UK advisers and solves a client need and can be clearly communicated. Thank you to those advisers that are participating in our market research surveys. It might give a clue as to what is currently in the laboratory!
UK equity income stocks are lower valuation/value bias so provide diversification against higher valuations/growth bias inherent in US equity exposure.
Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
For latest UK Equity Income index factsheet click here 
‘Income’ as an investment strategy should not be viewed as a catch-all. Drill down, and there are a variety of different strategies, each with their own outcome.
Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
For latest UK Equity Income index factsheet click here 
The article argues for a tactical shift out of bonds into UK equity income for multi-asset portfolio
Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
For latest UK Equity Income index factsheet click here 
Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
For latest UK Equity Income index factsheet click here 
Find out more about the Elston Smart-Beta UK Dividend Index (ticker: ELSUKI)
For latest UK Equity Income index factsheet click here  Portfolio Adviser shines a spotlight on the VT Munro Smart-Beta UK fund, delivering top-quartile returns over the past three years.
Read the full article on Portfolio Adviser 
In this article we explore the origins of a systematic UK Equity Income strategy now powered by Elston’s Minerva™.
UK equities are a helpful value-factor proxy. Value-based investing is a persistent driver of returns over time. But not all the time. We explore UK equities’ embedded factor tilt and how it can help diversification.
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