UK dividends smashed records in Q2!....

[idpickering]

...But is payout growth set to slow?

This from TMF;

Even the quickest glance at dividend forecasts for UK-quoted companies will show just how lucrative stock market investing can be. Shareholder payouts are rocketing right now, and fresh data from Link Group reveals the breakneck pace at which dividends have expanded of late.

According to its latest UK Dividend Monitor, released today, dividends from London-listed companies soared to all-time highs of £37.8bn in the second quarter. This was up 14.5% year-on-year and topped the then-record set two years ago, by a mammoth £4.4bn.

https://www.fool.co.uk/investing/2019/0 ... t-to-slow/

[IanTHughes]

...But is payout growth set to slow?

This from TMF;

Even the quickest glance at dividend forecasts for UK-quoted companies will show just how lucrative stock market investing can be. Shareholder payouts are rocketing right now, and fresh data from Link Group reveals the breakneck pace at which dividends have expanded of late.

According to its latest UK Dividend Monitor, released today, dividends from London-listed companies soared to all-time highs of £37.8bn in the second quarter. This was up 14.5% year-on-year and topped the then-record set two years ago, by a mammoth £4.4bn.

https://www.fool.co.uk/investing/2019/0 ... t-to-slow/

The weakening value of GBP must surely be at least part of the reason for the currently experienced increased total dividend being paid in the UK.

From the above linked article:

the weaker-than-expected 5% rise in underlying dividends, to £32.4bn, was delivered mainly by favourable exchange rate movements in recent months. Link Group estimates that around half of the on-year increase was driven by the recent sinking of the pound.

I wondered how that was playing out in my HYP.

In my HYP I hold HSBC Group (HSBA), BP Plc (BP) and Royal Dutch Shell (RDSB), as I am sure many others do too. For the Year Ending 31 Dec 2017 the total underlying USD dividend for all three was USD 2.79 and for the Year Ending 31 Dec 2019 (*) it will most probably be USD 2.80, an increase over the whole period of a rather meagre 0.36%! Meanwhile the GBP dividend for all three, the amount that I actually receive, has increased from a little over GBP 2.10 to a little over GBP 2.22 (*), an increase of 5.80%! And the foregoing is before calculating many other shares where the earnings and/or dividends are calculated in a currency other than the weakening GBP, increasing the GBP amount actually received.

As to the future? Too difficult to tell in my view. But once again, whether GBP weakens further or re-strengthens, the amount actually received, whether up or down, will in part be affected by GBP Exchange Rates

(*) - The total for the Year Ending 31 Dec 2019 is assuming current quarterly USD amounts are maintained as well as the current exchange rate


Ian

[TheRIT]

Strangely my FTSE 100 tracker, Vanguard's ETF VUKE, didn't show this in it's Q2 distribution:
- 2018 Q2 £0.44477
- 2019 Q2 £0.43775

My FTSE 250 tracker, VMID, only saw a very small increase:
- 2018 Q2 £0.36179
- 2019 Q2 £0.36599

No idea why the dividends are not flushing through.

[Alaric]

No idea why the dividends are not flushing through.

UK Companies can be somewhat lumpy in their distributions, given that most are half yearly. If they have a 31st December year end, they may distribute in the first quarter.

[TheRIT]

No idea why the dividends are not flushing through.

UK Companies can be somewhat lumpy in their distributions, given that most are half yearly. If they have a 31st December year end, they may distribute in the first quarter.

Understand the lumpiness but I was responding to the original post which said dividends were up 14.5% year on year in Q2. I haven't seen that flush through the FTSE100 and FTSE250 ETF's that I hold.

[OhNoNotimAgain]

No idea why the dividends are not flushing through.

UK Companies can be somewhat lumpy in their distributions, given that most are half yearly. If they have a 31st December year end, they may distribute in the first quarter.

Understand the lumpiness but I was responding to the original post which said dividends were up 14.5% year on year in Q2. I haven't seen that flush through the FTSE100 and FTSE250 ETF's that I hold.

You will need to check the small print in the prospectus to see how long the manger holds onto the dividend before paying out.
With an OEIC it is typically 2 months. So for an OEIC distributing monthly the dividend declared at the end of, say, April, will be paid out at the end of June and that will be for all the dividends received by the OEIC in April.

In your case the Q2 ETF dividend will probably therefore only capture one month of the quarter, and maybe not even that.

[TheRIT]

UK Companies can be somewhat lumpy in their distributions, given that most are half yearly. If they have a 31st December year end, they may distribute in the first quarter.

Understand the lumpiness but I was responding to the original post which said dividends were up 14.5% year on year in Q2. I haven't seen that flush through the FTSE100 and FTSE250 ETF's that I hold.

You will need to check the small print in the prospectus to see how long the manger holds onto the dividend before paying out.
With an OEIC it is typically 2 months. So for an OEIC distributing monthly the dividend declared at the end of, say, April, will be paid out at the end of June and that will be for all the dividends received by the OEIC in April.

In your case the Q2 ETF dividend will probably therefore only capture one month of the quarter, and maybe not even that.

Definitely good news if that's the case as I'll have that increase to look forward to in the Q3 distribution. I couldn't find any reference in the prospectus but the prospectus is 379 pages so I may have missed it. The section on dividends contained no reference to this type of delay.

Tracking error of these Vanguard ETF's is low so it must eventually wash out.

[Arborbridge]

...But is payout growth set to slow?

This from TMF;

Even the quickest glance at dividend forecasts for UK-quoted companies will show just how lucrative stock market investing can be. Shareholder payouts are rocketing right now, and fresh data from Link Group reveals the breakneck pace at which dividends have expanded of late.

According to its latest UK Dividend Monitor, released today, dividends from London-listed companies soared to all-time highs of £37.8bn in the second quarter. This was up 14.5% year-on-year and topped the then-record set two years ago, by a mammoth £4.4bn.

https://www.fool.co.uk/investing/2019/0 ... t-to-slow/

It doesn't feel like that to me - a very optimistic picture. I know it's only anecdotal, but my thought as I entered up a few dividends after my recent holiday was the thought that there are several dividends which are the same as previously paid. When I've done a proper comparison, I'll know more, but some numbers in £ look awfully familiar from having seen them before! This refers to ITs and HYP shares.

Arb.

[Arborbridge]

UK Companies can be somewhat lumpy in their distributions, given that most are half yearly. If they have a 31st December year end, they may distribute in the first quarter.

Understand the lumpiness but I was responding to the original post which said dividends were up 14.5% year on year in Q2. I haven't seen that flush through the FTSE100 and FTSE250 ETF's that I hold.

You will need to check the small print in the prospectus to see how long the manger holds onto the dividend before paying out.
With an OEIC it is typically 2 months. So for an OEIC distributing monthly the dividend declared at the end of, say, April, will be paid out at the end of June and that will be for all the dividends received by the OEIC in April.

In your case the Q2 ETF dividend will probably therefore only capture one month of the quarter, and maybe not even that.

Are they even obliged to pay out all dividends? I only ask, because I know that is not the case with some ETFs.

Arb.

[TheRIT]

Understand the lumpiness but I was responding to the original post which said dividends were up 14.5% year on year in Q2. I haven't seen that flush through the FTSE100 and FTSE250 ETF's that I hold.

You will need to check the small print in the prospectus to see how long the manger holds onto the dividend before paying out.
With an OEIC it is typically 2 months. So for an OEIC distributing monthly the dividend declared at the end of, say, April, will be paid out at the end of June and that will be for all the dividends received by the OEIC in April.

In your case the Q2 ETF dividend will probably therefore only capture one month of the quarter, and maybe not even that.

Are they even obliged to pay out all dividends? I only ask, because I know that is not the case with some ETFs.

Arb.

They are trying to track the performance of the FTSE100 so I believe they are. The prospectus states "...intend to distribute all or substantially all of the net income (interest and dividends, less expenses) of the Fund..." VUKE's OCF is 0.09% so will have only a small impact on dividends paid and shouldn't affect the percentage change year on year by much as each year had the expenses.

[Arborbridge]

They are trying to track the performance of the FTSE100 so I believe they are. The prospectus states "...intend to distribute all or substantially all of the net income (interest and dividends, less expenses) of the Fund..." VUKE's OCF is 0.09% so will have only a small impact on dividends paid and shouldn't affect the percentage change year on year by much as each year had the expenses.

I spy weasel words such as "intend" and "substantially" which gives them some wiggle room.

If the marketing department says the capital performance is what sells rather than these odd people who like big dividend increases - what will they do? I was told what they did in the case of UKDV - they held back some income and re-invested in capital growth rather than paying out as dividends. I felt the dividends were not growing as they should, and being suspicious of such fiddle factors, so out.

Arb

[eventide]

Declared dividends for FTSE100 companies which have gone xd so far this year account for 197 FTSE index points to date this year, compared with 180 index points in 2018, 167 in 2017 and 153 in 2016.

[eventide]

Declared dividends for FTSE100 companies which have gone xd so far this year account for 197 FTSE index points to date this year, compared with 180 index points in 2018, 167 in 2017 and 153 in 2016.

That's an interesting stat. Where did you get that from?

It is the accumulating figure for the FTSE100 dividend futures contract which settles on the December expiry (F1DV is the contract). Sadly there are no easily available public sources as far as I know. I compile it myself, weekly dividend index point data is published:

https://www.google.co.uk/search?q=ex+di ... fAP_uSB8AE

[OhNoNotimAgain]

They are trying to track the performance of the FTSE100 so I believe they are. The prospectus states "...intend to distribute all or substantially all of the net income (interest and dividends, less expenses) of the Fund..." VUKE's OCF is 0.09% so will have only a small impact on dividends paid and shouldn't affect the percentage change year on year by much as each year had the expenses.

I spy weasel words such as "intend" and "substantially" which gives them some wiggle room.

If the marketing department says the capital performance is what sells rather than these odd people who like big dividend increases - what will they do? I was told what they did in the case of UKDV - they held back some income and re-invested in capital growth rather than paying out as dividends. I felt the dividends were not growing as they should, and being suspicious of such fiddle factors, so out.

Arb

That option may be available in ETFs but it can't happen with OEICs. They just pay out what they get in

[Arborbridge]

They are trying to track the performance of the FTSE100 so I believe they are. The prospectus states "...intend to distribute all or substantially all of the net income (interest and dividends, less expenses) of the Fund..." VUKE's OCF is 0.09% so will have only a small impact on dividends paid and shouldn't affect the percentage change year on year by much as each year had the expenses.

I spy weasel words such as "intend" and "substantially" which gives them some wiggle room.

If the marketing department says the capital performance is what sells rather than these odd people who like big dividend increases - what will they do? I was told what they did in the case of UKDV - they held back some income and re-invested in capital growth rather than paying out as dividends. I felt the dividends were not growing as they should, and being suspicious of such fiddle factors, so out.

Arb

That option may be available in ETFs but it can't happen with OEICs. They just pay out what they get in

True, and I've always been a little cautious of ETFs as a result.