These ten companies pay 50 per cent of all UK dividends

More than a quarter (26 per cent) of the money managed by UK equity income funds is invested in just ten dividend-paying companies, according to research by fund managers at Henderson Global Investors.

Seven in 10 of the 52 funds analysed in the study, which included open-ended funds alongside investment trusts valued above £200 million, hold all of these top 10 companies.

- Top 10 most popular investment funds - March 2017

Henderson says the findings are symptomatic of a structural issue in the UK stock market: the top ten companies pay half of all UK dividends, with the top 20 companies paying 70 per cent of all UK dividends.

- Nearly half of investment trusts now pay quarterly dividends

The ten companies are:

  • AstraZeneca
  • Aviva
  • BP
  • British American Tobacco
  • GlaxoSmithKline
  • HSBC
  • Imperial Brands 
  • Legal & General
  • Royal Dutch Shell
  • Vodafone

Ben Lofthouse, fund manager of Henderson International Income Trust says: “As equity income portfolios get larger, fund managers are forced to hold these same largest companies in order to receive enough dividends to pay all of their shareholders. It is further evidenced by the fact that, of the largest equity portfolios in the UK, the average percentage of the total portfolio held in these top ten stocks was 39%. When the liquidity pool is small, fund managers simply have little choice.”

This story was first pbublished on our sister website Moneywise

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