Dividend strategies get sophisticated as risk aversion and sustainability drives demand

As fixed-income yields languish at historically low levels, it is no surprise that investors are seeking income from high-dividend companies. But while caution lies behind most investments in dividend-based structured products and exchange-traded funds, they are becoming increasingly sophisticated in terms of stock selection and risk control. Hannah Collins reports

In an environment where investors are displaying seemingly contradictory demands for both yield and safety, strategies that provide exposure to equities with high dividend payouts have had to find a way to take account of the risk aversion that is common to many investors in the current climate. The result has been an increase in the defensive complexity of these strategies, enabling them to promise higher yields as well as risk mitigation.

"In the past, when thinking about yield investors would