News - Investment
Categories: Investment
Topics: Uk income | Royal dutch shell | Glaxosmithkline | Bp | Hsbc
Income investors enjoyed a bumper year in 2011 as dividends from UK-listed companies hit an all-time high, surging 12.8% to £67.8bn.
Funds in the UK Equity Income sector managed to take advantage of this stellar dividend growth, with yields increasing on average by 11.3% in 2011, according to Morningstar.
However, a number of funds were ahead of the rest in growing their yields last year, albeit from a low base for some in 2010. Some benefitted from larger positions in the UK's biggest dividend payers, while others received a boost from exposure to less obvious names.
Top of the pile is the Unicorn UK Income fund, run by John McClure, who has raised the fund's yield by 59% over the past year, despite not having any blue-chip income heavyweights in his portfolio.
McClure focuses on smaller companies which aim to deliver both sustainable dividends and growth, as opposed to hunting for yield in mega-cap defensive names.
The manager saw large positions in the likes of machinery firm Castings and manufacturing group British Polythene Industries pay off.
In second place are Neil Tong and Kenneth Warnock, co-managers of the £45m Alliance Trust UK Equity Income fund, which has seen its yield increase by 58% over the past year.
The fund's top five holdings all feature in Capita Registrars' top ten UK dividend payers last year. Shell paid out £6.7bn in 2011, representing one tenth of total UK payouts, to retain its position as the number one dividend payer.
Royal Dutch Shell, GlaxoSmithKline, BP, HSBC and British American Tobacco make up over 5% each of the portfolio.
Meanwhile, the £220m Walker Crips Equity Income fund, co-managed by Jan Luthman and Stephen Bailey, is in third place after posting yield growth of 53% for 2011.
The fund holds a number of income heavyweights, including Unilever and Glaxo.
Luthman has a 4.8% portfolio position in Vodafone and is set for a further uptick in income as the telecoms giant is set to pay £2bn at the beginning of February after it receives a special dividend from its stake in Verizon Wireless.
The AXA Framlington Monthly Income and OPM Equity High Income funds complete the top five.
| Fund name | Yield increase from 31/12/10 to 31/12/11 | Yield as at 31/12/10 | Yield as at 31/12/11 |
| Unicorn UK Income | 59% | 2.19% | 5.54% |
|
Alliance Trust UK Equity Income |
58% | 1.65% | 3.98% |
| Walker Crips Equity Income | 53% | 3.98% | 5.37% |
| AXA Framlington Monthly Income | 51% | 3.76% | 5.65% |
| OPM Equity High Income | 42% | 5.14% | 8.91% |
| Standard Life UK Equity Income Unconstrained | 36% | 3.5% | 4.9% |
| Threadneedle UK Equity Income | 23% | 4.77% | 6.2% |
| Scot Widow UK High Income | 23% | 3.84% | 4.99% |
| Insight UK Equity Income Booster | 17% | 8.62% | 10.44% |
| Schroder Income Maximiser | 15% | 7.51% | 8.86% |
Source: Morningstar
Categories: Investment
Topics: Uk income | Royal dutch shell | Glaxosmithkline | Bp | Hsbc
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