The iShares UK Dividend ETF (IUKD) aims to track the performance of an index composed of 50 stocks with leading dividend yields from UK-listed companies, excluding investment trusts. As a result, it offers investors exposure to a range of high-dividend-yielding UK companies.
iShares UK Dividend ETF, Price & Chart
With a focus on income generation, the iShares UK Dividend ETF is an attractive option for those seeking regular income from their investments, which may be particularly attractive in low-interest-rate environments. While dividends are the primary focus of the ETF, it also provides the potential for capital appreciation over the long term.
The fund was launched in 2005 and holds 50 stocks. Its net assets currently stand at over £857 million.
iShares UK Dividend ETF Performance
| Year | Performance |
|---|---|
| 2025 (YTD) | |
| 2024 | +12.29% |
| 2023 | +5.75% |
| 2022 | -1.38% |
| 2021 | +23.43% |
IUKD Top Holdings (as of January, 2025)
| Company | Weight |
|---|---|
| HSBC | 6.22% |
| Rio Tinto | 5.37% |
| British American Tobacco | 5.09% |
| Legal and General | 4.95% |
| Imperial Brands | 4.75% |
| BP | 4.39% |
| Vodafone | 3.84% |
| NatWest | 3.80% |
| Lloyds Banking | 3.62% |
| Aviva | 3.50% |
UK Stocks Forecast
Bull Argument: When it comes to the bullish outlook for UK stocks, there are many that believe despite the headwinds, the market can see a strong rise in 2025. Deustche Bank analyst Sanjay Raja told The Independent that “2025 should mark a greater focus on UK listed shares.” Raja explains that this is due to “the Government's focus on lifting investment into UK plc – particularly through its efforts to consolidate pension plans.”
Meanwhile, independent markets analyst Michael Hewson told The Independent that there is no reason to believe “stock markets won’t continue the current momentum seen over the last few years”, adding that he feels the FTSE 100 could “head towards 9,000.”
Bear Argument: While there are many who are positive on London-listed stocks, there are others who have pointed to the various headwinds, especially stemming from the UK's most recent budget announcement. Mark Dowding, BlueBay Chief Investment Officer at BlueBay Fixed Income, recently said that, in the months ahead, “the UK is braced for higher utility bills, elevated council tax charges, rising food inflation, and increased prices linked to firms passing on higher employment tax charges.”
In this way, we think the December data for UK inflation may be as good as it gets, for the time being,” added Dowding. “Core to the UK’s problems on a medium-term view is the lack of growth, at a juncture when sentiment is depressed and the government seems lacking in ideas. Indeed, for all the talk of wanting to champion growth, often it seems the government’s actions are designed to have the opposite effect.”
Our View: While there are strong bullish and bearish arguments to contend with when assessing UK stocks, it is tough to get away from the doom and gloom feeling, especially being in the UK. However, the iShares UK Dividend ETF does offer a robust option for income-seeking investors looking to benefit from the UK’s dividend-paying companies. Its diversified approach helps mitigate risks associated with individual stock volatility, making it a viable choice for conservative investors aiming for steady income.
Who Should Buy the iShares UK Dividend ETF?
While the ETF may seem like a good investment choice, it is particularly suitable for:
Income-focused investors: This is clear. the iShares UK Dividend ETF is designed for those seeking consistent dividend income, making it ideal for anyone looking for consistent payouts.
Risk-averse investors: With its focus on established, high-dividend-yielding companies, the ETF offers a relatively stable investment option, meaning risk-averse investors may find it more suitable.
Long-term investors: Dividend stocks often perform well over the long term, providing both income and the potential for capital appreciation.
UK market investors: Again, another aspect that is clear here is that this ETF is only suitable for investors looking to gain exposure to the UK equity market with a focus on income generation.
