Octopus' McVey - small and mid caps offer much better dividend cover

Small and mid cap companies tend to be more vulnerable to economic disruption than their larger counterparts on the FTSE 100. So why invest in these companies for income, and should small caps be paying out regular dividends anyway? Chris McVey, manager of the Octopus UK Multi-Cap Income, argued that alongside the growth prospects of smaller companies, small and mid caps also offered better dividend cover than the likes of oil majors and tobacco stocks. The Citywire A-rated manager also highlighted some of his top UK income stock picks, as well as when he thinks dividends across small and mid caps will recover to pre-pandemic levels. Over the past year the UK Multi-Cap Income fund has returned 44.2% compared with a sector average of 29.1%.