View more on these topics

UK equity income managers expect lower dividend growth next year

Leading UK equity income managers are expecting a lower dividend forecast of around 5 per cent growth in 2013 as a number of ‘special dividends’ from the likes of Vodafone this year are unlikely to be repeated.

According to research by S&P Capital IQ, many fund managers are forecasting 5 per cent for dividend growth next year in comparison to between 7 and 10 per cent in 2012.

JOHCM UK Equity Income fund manager Clive Beagles and James Lowen are forecasting 8-10 per cent growth in 2012, but only 5 per cent in 2013.

M&G Charifund manager Richard Hughes has also targeted 5 to 6 per cent growth.

S&P Capital IQ says the issue of dividend growth has been clouded in 2013 because of the strong number of special dividend payments made this year, which are unlikely to repeated.

S&P Capital IQ says Vodafone is key to this debate given that its dividend accounts for 10 per cent of the historical FTSE All-Share dividend yield, much of which came from a special dividend payment passed on from the Verizon business, one of the largest telecommunications companies in the US which Vodafone has a 45 per cent stake in.

Beagles and Lowen believe the special dividend has resulted in Vodafone sharres becoming overbought. The pair say the real dividend cover looks poor at 1.1x and expect the firm’s management to change policy.

Recommended

BBA board looks at merger options

The British Bankers’ Association’s board has had internal discussions about a merger with another trade body, following the Government’s decision to end its role as the administrator of Libor. Following the recent rate-rigging scandal, Financial Conduct Authority chief executive designate Martin Wheatley recommended reforms for the administration and submission of Libor. In October, the Government […]

Mixed Investments 20-60% sector funds dominate best-sellers on Cofunds

The Mixed Investment 20-60% Shares sector has regained the top spot as the best selling sector on Cofunds in October. The sector regained its top spot after being overtaken by strategic bonds in September. Prior to this it was the best selling sector for the previous 37 months. The £3.9bn Jupiter Merlin Income fund, managed […]

L&G offers 40-day guarantee for G-Day annuity quotes

Legal & General is extending its guarantee on gender-specific annuity quotes from 18 days to 40 days ahead of the implementation of the EU gender directive on 21 December. The 40-day rate guarantee period will apply to all gender specific annuity quotations from 1 December to close of business on 19 December. Customers looking for […]

Lighthouse MD Stephen Gazard to join Sesame as distribution director

Lighthouse Advisory Services managing director Stephen Gazard is joining Sesame Bankhall Group as distribution director, Money Marketing understands. Last week, Money Marketing revealed Sesame Bankhall managing director of distribution Nick Kelly has left the company following a reshuffle of its executive team. A new distribution director role has been created encompassing the majority of Kelly’s […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com