BREXIT continues to dominate the outlook for the UK equity market, with chaos and uncertainty continuing to reign.

However, times of maximum uncertainty can often present the best opportunities for investors and waiting for clarity may not actually be the optimum strategy to follow right now.

We have seen global investors flee from the UK, with several surveys now showing significantly underweight, negative allocations to UK stocks.

At present, the UK market is categorically loathed by our international counterparts.

However, if one takes a closer look at the numbers, investors seeking income could be missing a trick by ruling out UK equities as the arithmetic is quite compelling. Put into a global perspective, the main UK index now yields almost 50 per cent more than the MSCI World.

While the UK has long been an income-seekers’ market, the current extreme positioning relative to history feels like a significant anomaly to us.

The UK index yield touched 5% recently and the income opportunities have rarely been greater.

If we compare the yield on equities to that available from government bonds, again the readings are at extreme levels. The yield gap between UK dividend yields and 10-year UK gilt yields are now at post-war highs.

To put the numbers into context, the historic yield on UK equities is currently above 4.5% while the yield on UK gilts is 1.3% - well below any current inflation expectations.

Given the ongoing political chaos, we find it unfathomable that investors should wish to lend to the Treasury on such sparse terms and would argue that accepting the ‘risk-free’ rate has rarely been riskier.

An explanation for all this may be that UK dividend payments are under severe threat. In aggregate, there is no evidence to support this, particularly when one considers the huge weight of dividend expectation that falls on the shoulders of our largest companies, many of whom generate dividends in US dollars.

The oil, mining and pharmaceuticals sectors stand out here along with giants such as HSBC.

While the high pay-out ratio has indeed been a concern for UK income investors in recent years, the recovery in earnings for the resources companies in particular has seen dividend cover improve and the risks in aggregate reduced.

None of this makes us want to invest heavily in such large, mature businesses, however, and many of them will struggle to grow their dividends over the longer term.

Our strategy for our UK Income Fund is unashamedly multi-cap and our key objective is to continue to grow our dividends to shareholders at least in line with inflation.

We believe that investing in a focused portfolio with a bias to medium and smaller companies gives the flexibility to achieve this goal without relying on high levels of income from a small number of huge companies whose best days are behind them.

2018 was a year of disappointingly negative returns from global equities, not just UK ones.

It’s worth remembering that other major global markets fared even worse than the UK, including Germany, Hong Kong and China.

Many of the issues facing global investors are universal and include rising interest rates, slowing economic growth and the threat of trade wars across key regions.

Despite this difficult background, it is possible to grow income to shareholders.

The case for investing in UK equities has become increasingly compelling and the high dividend yields currently on offer pay investors for many of the risks they are willing to take.

While the worst-case Brexit scenarios are not pretty, valuations are already extreme and UK shares could recover significantly from here.

Waiting for the clouds to clear may leave you at risk of leaving it too late to take advantage of the sunshine.

Scott McKenzie is an investment director at Saracen Fund Managers.