Covid dividends cuts push retail traders into leveraged ETFs in hunt for income

Q1 2021 payouts lower than previous year

Dividend cuts seen across the FTSE 100 and FTSE 250 in response to the impact of the coronavirus pandemic has pushed greater numbers of retail investors into leveraged ETF strategies to replace the lost income.

Analysis by ETF provider GraniteShares found that 35 blue chips and 85 FTSE 250 companies have either cut their most recent dividend, or plan to cut or reduce the next one. This decline in dividends has fuelled the growth in retail investors utilising leverage and short trading strategies via exchange traded products (ETPs), GraniteShares said. Global dividends reach $1.3trn in 2020 despite Covid cuts The company has seen the value of its 3x long and 3x short single stock ETPs increase by $352m in the first quarter of 2021 to $505m. According to the data, 30 companies listed on ...