Hello,
This is my first post in Stockopedia. I'll get straight to it. I'm investing for income. I have recently come across a FTSE 250 index tracker that yields 5.98%:
https://www.hl.co.uk/funds/fun...
However, I am confused because according to Stockopedia the FTSE 250 only yields 3.7%. If trackers supposedly "track" an index, how can the two yields be so different? I have also compared this with FTSE 250 tracking ETFs and they also have lower yields than this mutual fund.
Thank you!
That information does not seem reliable, HL warn that it may not be accurate. I would check it elsewhere.
Yeah, good point thanks.
I'm not sure if this should be behind the difference, but I did discover that the minimum initial investment in that fund is £100k!
The amount you invest won't effect the yield. There maybe some compounding of yields or another possibility is as they bought shares years ago the yield is now higher based on the original purchase as shares and dividends have increased, but not sure if that will apply to new investors. On another site I found the yield is 2.89%
That's what I was thinking. Either way, the lack of accessible information to help explain the difference in yields puts me off.
Plenty more fish...
Your link doesn’t open properly on my device, so I can’t see the product you refer to. Perhaps it is a leveraged product? Or the uses capital sales to enhance the yield?
I’m also investing for income and use IS UK DIVIDEND UCITS GBP (DIST) ETF (LON:IUKD) which selects the top yielding shares from the FT 350 - it doesn’t have the same reliance on banks and oil that many of the UK equity income funds have. Current yield is over 6%, 50 real holdings and no leverage. It works for me but DYOR
Curiouser and curiouser!
The HL figure of 5.98% is described as "Historic Yield" - "This figure is calculated by taking any income payments recieved over the previous 12 months, expressed as a percentage of the current unit price".
The Stockopedia figure comes with the caveat - "Median forecast of all divident payers".
So the HL figure for income is backward looking. The Stockopedia figure appears to be forward looking? Is that right???
