Lloyds Banking Group PLC (LON:LLOY) saw its shares as the most viewed on the website of investment platform Hargreaves Lansdown PLC (LON:HL.) today, helped by its inclusion in the firm’s recently-launched HL Select UK Income Shares fund.
Lloyds, which is now less than 3% owned by the UK taxpayer, is one of the top five holdings in the fund, which is managed by Steve Clayton and Charlie Huggins, and is the only bank in the portfolio.
In a ‘First look at the Portfolio’ piece, posted recently on the HL website, Clayton pointed out: “Lloyds Banking Group is distributing a big slice of its earnings these days and generating a lot of capital, which earns it a place in the fund.”
READ: HL UK Income Shares Fund first look ...
Lloyds shares currently yield 3.8%, after the bank boosted its 2016 payout with a 0.5p special payment, to take its total distribution for the year to 3.05p.
The lender – rescued by a £20.5bln bailout during the 2007-09 financial crisis, which left the taxpayer owning 43% of the bank - returned to the dividend list in 2014 with a token 0.75p payout.
That was followed by a 2.75p payout in 2015, which also included special dividends.
Expanding on the stock’s inclusion, the fund’s managers said: “Lloyds is not exciting. Excitement almost did for Lloyds back in 2009, so the business is now thrill-averse. And that is a good thing for dividend-seekers.”
They added: 'Having cut costs enormously following the Halifax Bank of Scotland merger, Lloyds now has an industry-leading level of efficiency, which helps to support profit margins and cash generation, further reinforcing its attraction.'
Lloyds shares remained marginally lower in late morning trade, however, down 0.8% or 0.55p at 66.40p, weighed by uncertainties for the sector after the recent ‘Trump dump’, and after a downgrade in rating to ‘sell’ from ‘hold’ yesterday by German broker Berenberg.