iShares IUKD14 Dec 2020 17:31
Rare postings here on LSE - but good to read and get other PI knowledge/input.
So just going to say, why I personally came in and why! I will hold this investment for the next 2-3 years. I certainly do not discount any of the decisions that were previously stated.
I entered mid April at 532 for my own, and also my 2 lads SIPPs. Note SIPPs not ISAs.
As we all know, this ETF tracks the FTSE, taking the best dividends from the top 50! back then I think it was advertised at a near 10% dividend. We now know this sits at ruffly half! Is It a surprise? I think we would all agree - no!
So looking forward, this ETF remains attractive for 3 reasons:
1. Capital - even if you invested today, you should see a 20-30% capital rise in the the next 2/3 years (would say as aviation comes back online and the requirement of oil feeding that will make significant difference). Uncertainty of Brexit will be gone - note 'uncertainty'. Pandemic will no doubt continue, but 'UK plc' you'd like to think will have gripped vaccination/testing over this time.
2. The dividend - Respected some are departing, as chasing a higher dividend in different companies/funds! For me iShares negates a lot of risk! Hopefully not needing to explaining the magnitude of iShares! Unlike maybe, individual companies that you may need to watch consistently. this ETF is diverse throughout the FTSE. So maybe able to grab 1-2 % more else where! But my thinking is, as the economy recovers/capital rise, the dividend from the top 50 will do also! a little patience maybe! But I'd say 'risk' significantly reduced. Any single company can a have a shocker, such as a change of management overnight and lower/even ditch of dividend. This is why the balance of the top 50 is attractive.
3. Charges - low - ETF. With one of the biggest investments companies doing all the work for you.
Not doing my own investment any favours here - but if I were to come in now, I would wait for the FTSE Christmas retail spike to be over and also take into consideration Brexit! Christmas and Brexit uncertainty done and with economy on an upturn - this ETF makes sense to add to any long term investment plan.
To finish I believe the capital will recover and more so! and whilst it takes it's time I am happy to take 5% of income (of course automatically reinvested building your stock). With an upside of 'potentially' 10% by 2024!
From my own research and happy to be corrected - generally companies with high dividends (not many out there greater then the 5% stated at this time) do not have the potential capital upside. In short will the FTSE recover? yes it will! But with time!
So with IUKD, we have the potential low risk capital upside, and a good dividend that represents 'current' economics.
My thoughts only, and of course welcome any feedback to my outlook. Merry Christmas all and GLA with your investments.
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