Private investors lose out

Private investors can expect lower dividends in 2013 than they received last year as big special dividends come to an end and investor market share drops from 11.3% to 11%.

Private investors lose out

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Dividend pay outs were £9bn in 2012, a figure which is expected to drop to around £8.8bn for this year. They have already started to decline, falling £4.7bn year-on-year in Q1.

The research also revealed investors missed the dip in the market in early June and failed to take profits after the strong run up in share prices during the first few months of the year. This cost an estimated £11.5bn as holdings fell in value to £210.7bn from £222.2bn at the start of May.

Wider picture

Private investors added a net £2.3bn to their holdings in the six months until the end of May. They had already added £6.1bn to their equity holdings since March 2009, of which over half, £3.6bn, was added in the past 12 months.

Investors have added to their holdings in 12 out for the 17 quarters since March 2009 and the busiest trading period for two years came between December and May this year when a total £45bn in shares was traded.

Cyclical shares remain in favour, and have been for over two years following a two year focus on defensive shares.

Justin Cooper, chief executive of Capita Registrars, said: “: “Private investors have enjoyed a very good twelve months in the stock market, scooping capital gains and healthy dividend payments. They have traded shrewdly over the last few years, and have often timed the market well.

“But this year they failed to observe the old market cliché warning them to ‘sell in May and go away’. It’s cost them dearly in recent weeks. Investors have had a stark reminder that equities are not a one-way bet. With growing gloom over global growth, despite better news in the UK, and the likelihood of a winding down of monetary support, the outlook for asset prices is highly uncertain.”

A detailed breakdown of fund sales last month can be found here. 

 

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