The Brexit conundrum remained unsolved as March drew to a close, and the UK remained in the EU as Brexit Day was pushed out to 12 April. The yield on the FTSE 100 Index declined over March from 4.54% to 4.44%, while the FTSE 250 Index’s yield rose from 3.11% to 3.19%.
- The FTSE 100 Index’s yield remained firmly above 4%
- The benchmark gilt yield fell below 1%
- Global dividends rose to a record US$1.37 trillion in 2018
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The Brexit conundrum remained unsolved as March drew to a close, and the UK remained in the EU as Brexit Day was pushed out to 12 April. The FTSE 100 Index rose by 2.9% during March, while the FTSE 250 Index fell by 0.3%. The yield on the FTSE 100 Index declined over March from 4.54% to 4.44%, while the FTSE 250 Index’s yield rose from 3.11% to 3.19%. Meanwhile, the benchmark UK government bond yield fell from 1.25% to 0.97%, falling below 1% for the first time since the third quarter of 2016 amid growing agitation over the possibility of a no-deal Brexit. The best-performing FTSE industry sectors over the first quarter of 2019 were industrial metals & mining, software & computer services, food & drug retailers, and tobacco. The worst-performing sectors included leisure goods, fixed line telecommunications, and automobiles & parts.
“Globally, nine out of ten companies raised their payouts or left them unchanged in 2019”
Global dividends rose to a record US$1.37 trillion over 2018 as a whole, representing a headline rise of 9.3%, according to Janus Henderson’s Global Dividend Index. On an underlying basis, dividends grew by 8.5%, representing their strongest performance since 2015. Globally, nine out of ten companies raised their payouts or left them unchanged in 2019. UK, dividend payments rose at a headline rate of only 4%, dampened by a drop in special dividends. On an underlying basis, however, UK dividends rose by 8.8%. Growth was fuelled by strong contributions from the mining and banking sectors. British American Tobacco was the single largest contributor, paying out an additional US$1.2 billion in the first full year since its acquisition of competitor Reynolds American. Elsewhere, in the energy sector, BP increased its dividend for the first time since 2014 and Shell inititated a share buyback.
February 2019 was the fifth consecutive month of net retail outflows, according to the Investment Association (IA). UK equity funds experienced net retail outflows of £236 million during the month; in comparison, Global was the most popular sector, enjoying net retail inflows of over £500 million as investors sought to diversify their exposure against an uncertain political and economic backdrop. The UK Equity Income sector experienced a reversal of fortune during February: having improved during December and January, demand tailed away in February. The UK Smaller Companies and UK All Companies sectors also experienced net retail outflows over the month.
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