AIC Confirms Significance Of Private Investor Shareholdings – Forbes Advisor UK

19 February: Platforms Used To Manage Direct Ownership

UK private investors directly own nearly a quarter of all investment trust shares by value according to research from the Association of Investment Companies (AIC), writes Andrew Michael.

At £41 billion, this is approaching the £46 billion held by wealth management companies on behalf of their clients.

Roughly half of all investment trust shares by value, worth £89 billion at the end of December 2023, are held by City institutions such as company pension schemes and insurance funds, according to the AIC, which excluded venture capital trusts from its analysis.

Around £4 billion is held by business-to-business investing platforms used by advisers who manage money on behalf of their investment clients.

Out of the investment trust shares owned by private investors, the AIC said five online investing platforms – Hargreaves Lansdown, interactive investor, AJ Bell, Charles Stanley, and Halifax Share Dealing – accounted for around three-quarters of these holdings, worth about £32 billion.

Investment trusts are quoted on the London Stock Exchange where their shares are traded in the same way publicly-listed companies such as Shell and Marks & Spencer. They are ‘closed-ended’ in that each has a fixed number of shares. 

With total investment trust shares valued at approximately £176 billion at the end of last year, the sector is considerably smaller than the £1.5 trillion tied up in ‘open-ended’ investment funds that includes unit trusts and index trackers.

Richard Stone, AIC chief executive, said: “This report is the most comprehensive analysis ever of investment company (trust) ownership. It reveals that our shareholder base is as diverse as investment companies themselves, from the largest institutions and wealth managers all the way through to financial advisers and private investors holding shares on platforms.

“This has always been the case, from the days when investment companies were invented in 1868 to provide the investor of moderate means with the same advantages as large, sophisticated investors.”

25 January: Shareholders Benefit In Era Of High Interest Rates

Banks were the UK’s largest source of dividend payouts in 2023, the first time since the global financial crisis of 2007 that the sector has come out on top, writes Andrew Michael.

Figures from the Computershare Dividend Monitor show that companies paid out £88.5 billion last year in the form of regular dividends, up 5.4% on 2022. Special, or one-off, dividend payments boosted the total figure to £90.5 billion, down 3.7% on the previous year.

Computershare said that dividend growth in the fourth quarter accelerated by an underlying rate of 15.6%. It added that the boost was largely driven by the performance of HSBC, which fully restored quarterly payouts in 2023 for the first time since the pandemic. 

The decision helped the company regain its position as the UK’s largest dividend payer, an accolade it last held in 2008.

HSBC’s impact and growth across the sector meant that, for the second year running, banks made the largest contribution to UK dividend growth, hiking payouts among the group by almost a third to £13.8 billion in 2023. This meant the sector was also the biggest dividend-payer for the first time since before the 2007 financial crisis.

Computershare reported that last year’s high energy prices were responsible for driving a 16% increase in dividends from the oil sector, worth a total of £11.6 billion during 2023. 

The company added that while dividend growth was on the up from airline, leisure and travel companies, pay outs remained behind pre-Covid levels as businesses continue to recover from the effects of the pandemic.

Forecasts for the year ahead suggest that overall growth would slow slightly by around 2%, with regular dividend payouts estimated at just under £90 billion in total for the year.

Mark Cleland at Computershare said: “The return to prominence by the banks is remarkable – 13 years of rock-bottom interest rates made it very hard for the sector to make profits, but the need to quell inflation with higher interest rates means the last two years have delivered a dramatic turnaround.

“Bank investors are reaping the dividends of this reversal, and we expect them to see even larger payouts in 2024.”

23 January: Rises Anticipate Positive News From Tech Firms

Two influential US stock indices surged to all-time highs yesterday (Monday), potentially heralding the start of a bull run as a string of high-profile companies prepare to update investors, writes Andrew Michael.

The Dow Jones Industrial Average, broke through the…