Burdett: Falling shares are in the news, but what about falling yields?

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Falling share prices are current news, but over the past two years the big issue for new investors is perhaps a different one: that of large falls in yields.

Every year in July we review the IMA income-producing sectors, identifying trends in distribution yields. Over the past two years the data reveals significant falls in dividend yields for all the major IMA income-producing sectors. For IFAs talking to new clients with income requirements, this is a significant issue in an inflationary world with record low cash rates. Our review shows the IMA UK Equity Income sector average yield in July this year has fallen by 33% over the past two years – down from 5.8% to 3.9%. Despite nominal dividends rising quite substantially, the appreciation of ...

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