For investors looking for UK-listed stocks with a track record for dividend payouts, the SPDR S&P UK Dividend Aristocrats UCITS ETF (UKDV) may be a good choice. It provides investors with targeted exposure to a selection of UK companies known for consistently increasing or maintaining their dividends over time. The ETF aims to track the performance of specific high dividend-yielding companies from within the UK.
UKDV – SPDR S&P UK Dividend Aristocrats Price & Chart
The S&P UK High Yield Dividend Aristocrats Index measures the performance of the 40 highest dividend-yielding UK companies within the S&P Europe Broad Market Index (BMI).
Dividend stocks are, of course, favoured by income-focused investors for their potential to deliver reliable income streams alongside capital appreciation. The ETF offers a portfolio of dividend-paying UK companies. It was established in 2012 and currently has £90.64 million in assets under management (as of January 10, 2025).
SPDR S&P UK Dividend Aristocrats Performance
The SPDR S&P UK Dividend Aristocrats UCITS ETF has shown more resilience than growth over recent years, as you may expect. While it dropped following at the beginning of the Covid pandemic, it quickly bounced and has remained steady since. However, it remains well below its pre-pandemic highs. However, while the price is important, dividend yields are generally the driving factors for investors buying the ETF.
As of January 2025, the ETF has delivered the following returns:
| Year | Performance |
|---|---|
| 2025 (YTD) | |
| 2024 | +10.8% |
| 2023 | +5.75% |
| 2022 | -8.03% |
| 2021 | +14.22% |
UKDV Top Holdings (Q1 2025)
| Company | Weight |
|---|---|
| IG Group | 5.29% |
| Drax Group | 4.96% |
| National Grid | 4.91% |
| Games Workshop | 4.87% |
| NatWest | 4.81% |
| Legal & General | 4.69% |
| LondonMetric Property | 4.22% |
| Schroders | 4.21% |
| Reckitt Benckiser | 4.12% |
| Hargreaves Lansdown | 3.66% |
UK Stocks Forecast
Bull Argument: 2025 hasn't started well for UK stocks or the UK economy, in general, as the impact and potential effects of the budget cause concern. However, Morningstar's Investment Management Outlook for 2025 highlighted Europe, and “the UK in particular” as “making it the most attractive developed-markets region globally.”
Meanwhile, AJ Bell said in a recent report that the FTSE 100 dividend will cover the index's decreases. “Analysts expect £78.5 billion in dividends from the FTSE 100 in 2024, before a 6.5% increase in 2025 to £83.6 billion,” said AJ Bell investment director Russ Mould. He adds that It might take stronger global economic growth and upgrades to earnings and dividend forecasts “before the UK really catches investors’ imagination once more, despite its potential yield appeal.”
Bear Argument: However, Mould also warns that profit forecasts have slipped lower again while dividend growth is still very concentrated. Within the FTSE 100, Mould notes that “just 10 companies are forecast to pay out 54% of the forecast total for 2024, at £42.7 billion, while the top 20 are expected to chip in £55.7 billion, or 71% of the total.”
Another factor to watch out for, according to the AJ Bell investment director, is forecast dividend cover, which is said to be back below the two times threshold. “The drop below two, thanks to the ongoing slide in earnings forecasts, could lead some investors to question the reliability of dividend estimates, especially if there is a nasty surprise awaiting the global economy and markets in 2025, or even 2026,” said Mould.
Our View: Despite the concerns highlighted above, UK dividend stocks are still a solid option for income-focused investors, making the SPDR S&P UK Dividend Aristocrats UCITS ETF a potentially attractive option for those who value stability and consistent returns. In addition, its focus on companies with a strong track record of dividend payments makes it a compelling choice for those looking to add a defensive component to their portfolio.
Who Should Buy the SPDR S&P UK Dividend Aristocrats UCITS ETF?
Like any asset, the SPDR S&P UK Dividend Aristocrats UCITS ETF will appeal to some more than others. Therefore, this ETF is particularly appealing for:
- Income-focused investors: As we have mentioned many times above, the ETF has one type of investor in mind: those seeking reliable dividend income.
- Risk-averse investors: One aspect that we have not mentioned too much above is the ETF's appeal to risk-averse investors. The stability and lower volatility of dividend-paying stocks make this ETF suitable for conservative investors.
Long-term investors: As with most investments, this ETF is also more suitable for those with a long-term timeframe, given the steady income and potential for modest capital appreciation.
