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FTSE100 dividend yield shows equities are a buy, says Dugan
The fact the FTSE100’s 4.9 per cent dividend yield is above the yield of the 10-year government bond shows there is dividend support for the UK equity market, according to Gary Dugan, chief investment officer at Merrill Lynch Global Wealth Managers.
To have a dividend yield above the government bond yield is “quite extraordinary” and traditionally a signal that equities are a buy, he said. "The only challenge to that apparent cheap valuation is whether the dividends are safe or the equity risk premium has materially increased from previous norms.”
