LONDON (Reuters) - Investor Neil Woodford's Equity Income Fund sold its 160 million pound stake in BAE Systems BAES.L in July, it said on Friday, citing pension and dividend concerns.
“(BAE Systems) has a substantial pension deficit which is something of a concern in this environment of ultra-low interest rates,” the firm said in a monthly fund update.
“With only modest growth in the dividend expected over the next few years, it is no longer as appealing as other businesses.”
BAE Systems said in July that its share of the company’s net pension deficit increased by 1.6 billion pounds in the first half of 2016 to stand at 6.1 billion.
Britain’s combined defined benefit, or final salary, pension deficit has hit 1 trillion pounds, consultants Hymans Robertson said on Friday.
($1 = 0.7708 pounds)
Reporting by Carolyn Cohn; editing by Simon Jessop
Our Standards: The Thomson Reuters Trust Principles.