We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

In this section

HL Select Funds

Raising the Dividend

HL SELECT UK INCOME SHARES

Raising the Dividend

Fund changes

Important information - The value of this fund can still fall so you could get back less than you invested, especially over the short term. The information shown is not personal advice and the information about individual companies represents our view as managers of the fund. It is not a personal recommendation to invest in a particular company. If you are at all unsure of the suitability of an investment for your circumstances please contact us for personal advice. The HL Select Funds are managed by our sister company HL Fund Managers Ltd.
Steve Clayton

Steve Clayton - Fund Manager

16 May 2019

We are delighted to announce that we have raised the regular monthly dividend payment by 5%. The first payment at the higher level is for the month of April and will be paid in late May, to investors who were holding the fund at the end of April.

The new monthly rate is 0.315p per unit. Holders of income units will see this paid into their income accounts, holders of accumulation will have the equivalent payment rolled back up into their units’ value. This is why over time, the price of accumulation units becomes greater than the price of income units.

All investments and their income fall as well as rise in value, so you could get back less than you invest.

Monthly income

We aim to pay dividends monthly, with eleven “regular” dividends each year and one “final” dividend paid after the fund’s financial year has ended (which you receive in October). The final dividend includes all the income that the fund has received that year, but not already paid out. Because the fund is likely to receive occasional special dividends and other one-off payments from time to time, we would typically anticipate the final dividend to be larger than the regular payments.

We’ve previously written that we hoped to be able to raise the dividend this year, but were holding back given an uncertain economic environment. We are now half-way through the fund’s financial year, which ends on 30 September and it looks unlikely that events will lead to companies lowering their dividend payments in the near term.

So as income received by the fund has risen, we are passing it onto our investors. We currently expect that the final dividend will also be at least 5% higher than last year’s payment. But as we say, dividends are variable and not guaranteed.

Next year

We spend a lot of time looking at projections of the fund’s income, to make sure we are on track. At this stage we can see that consensus forecasts for the shares within the fund suggest that we will be able to further raise the regular dividend for the following financial year. But of course much can happen, not least with Brexit still swirling.

The fund’s income is sheltered to a degree by the overseas exposure of many of the companies within the fund. If sterling falls versus other currencies, the value in £s of those overseas profits goes up. That can offset any weakness in their UK earnings.

Important - This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information. Unless otherwise stated performance figures are from Bloomberg and estimates, including prospective yields, are a consensus of analyst forecasts from Bloomberg. They are not a reliable indicator of future performance. Yields are variable and not guaranteed.