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Holly's Blog: Tubby Tubby Passive Not Massive

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Tubby Tubby Wash Wash, Hands Face Space. Reassured? Great. Diversified, global funds are popular as UK funds lose their shine. And passive funds are also being spurned in favour of the active alternatives.

 

The UK’s second largest platform Interactive Investor had only 2 passive funds in their top 10 most-bought fund list for July – compared to a whopping 8 in March. And active fund manager Baillie Gifford had 6 out of the top 10 bestsellers. One reader told me off a few weeks ago for writing too much about this fund house (he thought it was biased) but writing about retail fund sales at the moment without mentioning these guys would be like writing a copy of Smash Hits in the 80s without mentioning Duran Duran.

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Dividends are looking like another thing of the past at the moment. Although we tend to write more about investments which will (hopefully) go up in value, many people of course also invest for the regular dribbles of cash payouts (dividends) which some cash-heavy firms share out with their shareholders. Oil companies have traditionally been big dividend payers, but BP this week cut its dividend, joining five big banks, Shell, various insurance giants, and BT as big names to have cut these payments since Covid. And when I say cut, I mean ‘halved’. This was the first cut from BT in a decade #(oil)drumroll.

 

So where to look if you want income? 

The Share Centre shared some ideas this week - healthcare giants GlaxoSmithKline and AstraZeneca are yielding 5% and 2.5% respectively. (This means for every £100 of shares, you’d get £5 and £2.50 paid out a year although these amounts are not fixed/guaranteed as oil company shareholders have learnt over the last few months.)

 

Other tips given are utilities - National Grid (5%), United Utilities (4.7%), and SSE (6%). There’s also Vodafone (6.9%). And insurer Legal & General are the only biggie not to cut – 8% is the current yield up for grabs. And last and definitely least, tobacco shares pay a lot (British American Tobacco and Imperial Brands circa 8% and 11%), although I personally think anyone who invests in this dying industry is bonkers. But that’s another story for another day...

 

Have your say...

Finally – we are in to the final few days of voting for our Investor Choice Awards. We have had over 2,000 votes so far – last call for your say on who you think is the best investment platform and who is the best fund manager. We will share the results with you next Friday in a frenzy of excitement at midday via this blog.

 

Have a lovely weekend all. As you read this I will be heading up the M5 (the wrong way) as we go into a heatwave, after a wonderful week of rain in Devon. I mustn’t complain. I love a Devon beach in the rain which matters not when you have a wetsuit and a doughnut in hand! And we had a scorching day last Friday as we sat in a traffic jam on the M5 going down. #staycations #livingthedream #tubbytubbyhothot

 

Holly

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