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Oil majors have it covered – for now

But yield is a function of the market, so it’s unsurprising to see that share prices for the former grouping have declined by an average of 23.6 per cent over the past 12 months. As things stand, the yield on UK equities is well in advance of its long-term average, possibly implying that shares remain undervalued, both in terms of overseas markets and other asset classes.

We live in interesting times. And with no resolution to the Brexit impasse likely until the end of October, external concerns will continue to keep a lid on sterling. If, by some miracle, agreement on a trade deal is reached prior to then, it’s probable that sterling would retrace against the dollar. This would effectively reduce distributions, as many of the biggest payers in the index denominate their accounts in US currency. When the pound slides against the dollar, it’s generally good for income seekers focused on the FTSE 100, as companies trading on the UK benchmark have a much greater proportion of revenue generated from abroad. Foreign exchange translations increased the first-quarter dividend growth rate by £613m, or 3.7 percentage points, with the benefit particularly noticeable in the oil & gas and pharmaceutical sectors, which provided four out of the top five payers during the period.

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