Dividend and conquer

In the challenging markets that we now face the stretch for yield continues. Gilts and corporate bonds are currently the popular choice of product to achieve this, but you shouldn’t forget the third, and possibly the most traditional form of income – company dividends.

Dividends are a long established feature of company profiles and investors with an income strategy will usually search the equity markets for those companies paying the highest yield. As John Cotter explained in our recent Cotters Corner on identifying high yield stocks;

“In the world of equity, the dividend is not only a massively under estimated part of the total return but it can also be a major factor in determining the future level of growth and support of the share price.”

However in today’s market conditions, even dividends are coming under threat. As companies face challenges to their profitability there is a knock-on pressure to reduce or remove the dividend payment and even traditional defensive dividend payers have indicated that their dividend payment won’t be increasing this year.

 

So what options are available to investors searching for equity dividends?

You could continue to scan the markets for companies paying the highest dividends, but an alternative is to invest in an Exchange Traded Fund (ETF) designed to do that work for you.

iShares FTSE UK Dividend Plus (IUKD)

If you are interested in high yielding stocks, you may be interested in the iShares FTSE UK Dividend Plus (IUKD) which offers exposure to around 50 UK companies with the highest forecasted dividend yields in the FTSE 350. This equity fund is designed to select high dividend paying stocks in a single share.

The iShares FTSE UK Dividend Plus is benchmarked against the FTSE UK Dividend+ Index - a yield weighted index designed to select and measure the performance of high yield stocks within the universe of the FTSE 350, excluding Investment Trusts.

 

Key features of the iShares FTSE UK Dividend Plus (IUKD)

• Diversification – iShares FTSE UK Dividend Plus offers exposure to approximately 50   UK companies with the highest dividend yield on the FTSE 350 across a range of sectors including financials, consumer services, industrials, utilities and oil & gas.

• Income - Provides a dividend based on the dividends paid by the companies held within the fund. To qualify for the next dividend due to be paid on 24 June you’ll need to hold the iShares FTSE UK Dividend Plus, on or before the 27 May.

• Simple – listed on the London Stock Exchange (LSE) it trades like a share at any time on the LSE and tracks the FTSE UK Dividend+ Index.

• Low Cost - a low annual management charge of just 0.40%. Invest online and you’ll pay standard commission (from £6.95 to £12.95 per trade).

• Flexible – can be held in MarketMaster®, or within the tax-efficient wrapper of an ISA or a SIPP account.

• No Stamp Duty – as with all iShares, the iShares FTSE UK Dividend Plus is exempt from Stamp Duty.

• Transparent – the components of the iShares FTSE UK Dividend Plus are fully visible to an investor and updated on www.iShares.co.uk daily.

 

Exchange Traded Funds (ETFs) and iShares are traded like shares and may not be for everyone. They closely track the performance of an index and as such their value can go down as well as up and you may get back less then you invested.

NOTE: Values and income paid can fall as well as rise.

The iShares FTSE UK Dividend Plus (IUKD) will appeal to investors who:

Are targeting income as an objective and are looking for a simple     investment product that could help achieve this.
Want exposure to a wide range of high quality corporate bonds selected  by professional fund managers.
Are comfortable accepting the risk of investing in fund that tracks high yield equities.
Prefer to trade online and like transparency of price and of holdings.

 

So, if you’re seeking a regular income, the iShares FTSE UK Dividend Plus (IUKD) could be for you.

 

Supporting information for the iShares FTSE UK Dividend Plus (IUKD)

View today's top 10 holdings

 

Fund Facts Summary

Index	FTSE UK Dividend+ Index
Epic	IUKD
Asset Class	Equity
ISA/SIPP eligible	YES
Annual Management Charge	0.4%
Dividend Frequency	Quarterly - March, June, September, December
Ex Date	27-May-2009

 

For full fund facts download the factsheet below or visit www.ishares.co.uk where information on the iShares FTSE UK Dividend Plus are updated daily.

 

Download iShares FTSE UK Dividend Plus (IUKD) Factsheet

Download iShares FTSE UK Dividend Plus (IUKD) Simplified Prospectus

Access the latest iShares information and tools at www.ishares.co.uk

Remember that whenever you want to trade, simply return to this site and login to trade.

 

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