Like the UK economy, dividends paid by UK companies to shareholders are firmly in recovery mode. Last week, wealth platform AJ Bell forecast that dividend payments made by the 100 largest companies listed on the UK stock market would grow by 25 per cent this year to just short of £77billion.
Although the bounce back is admittedly after the dividend decimation of last year caused by the economic fallout from the pandemic, it will be warmly welcomed by an army of private investors who depend on the income to bolster their household finances.
If AJ Bell s financial crystal ball gazers are right, it should mean that the FTSE100 Index as a whole will deliver an annual income this year equivalent to around four per cent – a rate not available from most other financial assets, especially cash where savers are lucky if they can get an annual return of 0.01 per cent.
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For many people around the UK, ways of working have had to be adapted during the course of this unusual year. Working from home, talking to colleagues via a video, and conference calls held in living rooms are all things fund managers have had to adapt to doing too. For Artemis Income fund manager Nick Shenton, it
Brian Dennehy, Fundexpert: Fly with British Airways I would invest in International Consolidated Airlines Group (IAG) – British Airways in old money. This share, listed in London, should be a reasonably straightforward way to double your money in 2021. Why? Well, there is massive pent-up demand for holidays while IAG shares are an obvious target for investors looking for a brighter 2021 and who have a lot of cash to put into the market – be it retail investors, UK institutions, or global investors who are massively under-invested in Britain. The big caveat, of course, is the virus taking a new and more dangerous path – so I would apply a stop-loss. I would sell the shares if they fall 15 per cent below my buying price – £1.60. So £1.36 and I m out. But I m confident I m backing a winner.