Spring is in the air and dividend growth is picking up

I found my attention drawn last week to an interview in the Investor's Chronicle with Rathbone's star manager Carl Stick by Leonora Walters.

Carl repeated a core insight of any equity income or value-orientated manager/investor – headline dividend yield matters much less than the source and pace of future dividend growth. It seems obvious to us all now, but try and tell that to the scores of financial planners who recommended the iShares UK Dividend Plus ETF back in 2005 and 2006. Large numbers of otherwise-sensible professionals thought any index-tracking vehicle jampacked full of decent FTSE 350 names paying out over 6% in dividends in a bullish market (think of it – capital growth and that dividend yield) was almost a one ...