IUKD
iShares UK Dividend UCITS ETF GBP (Dist)
Published by Radif Partners · Updated
Overview
iShares UK Dividend UCITS ETF GBP (Dist) (IUKD) tracks the FTSE UK Dividend+ index and holds its constituents directly, a physical replication managed by iShares. Dividends are paid out to holders rather than reinvested, so IUKD suits investors seeking regular income. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.40% of assets, and the fund holds 1.3B under management. Over five years the fund returned 6.8% a year on average, against 17.2% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2005-11-04, the fund is denominated in GBP and has 21 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because IUKD distributes, every payment is taxable in the year it is received, against the dividend allowance in a general account, while it stays sheltered inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
Ongoing charges of 0.40% place this fund 18th of 21 comparable funds, whose median is 0.35%. On £10,000 that costs about 40 a year and 400 over ten years at a constant amount, deducted daily and never visible on a statement: it shows up in the gap between the fund's return and its index's. At this level, neither low enough to be an argument nor high enough to be an obstacle, the decision rests elsewhere: on the index tracked, on the distribution policy, and on what your broker charges to buy.
Replication is physical: the fund actually holds the constituents of FTSE UK Dividend+, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.40% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is distributed: the fund pays out the dividends it receives, usually one to four times a year. For a holder living off the portfolio that is what is wanted, since the income arrives without selling. For someone still accumulating it is a tax disadvantage in a taxable account: each payment is taxed in the year received, so the amount reinvested is reduced before it starts working again. Reinvesting by hand also costs a dealing commission each time and often leaves cash idle for want of the price of a whole unit. An accumulating class on the same index, where one exists, settles the question.
With 1.3 billion in assets and 21 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of FTSE UK Dividend+, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
FTSE UK Dividend+ selects companies on their dividend, and that is an investment decision rather than a measurement. A high yield comes either from a solid payer or from a company whose price has fallen, and the screen does not always tell them apart: a yield index ends up mechanically overweight in the sectors that distribute heavily because they have little to reinvest. What counts is the selection rule, often several years of rising dividends, and the sector cap. A dividend, moreover, is not a return: it leaves the company and the price adjusts by as much.
Over one year the fund shows 15.7% against 6.8% annualised over five years: the recent year sits well above the long average. A gap in that direction mainly counsels care about the entry point, since what has risen sharply lately costs more today than a year ago, and the long average is the figure that best describes what to expect.
0.40%
1.3B
1,295M GBPMedium
240
Physical
Distributing
GBP
IE
FTSE UK Dividend+
iShares
2005-11-04 (20 years)
Contextual Analysis
Fund Size
With 1.3B in assets, this is a large fund, good liquidity and tight spreads.
Fee Positioning
A TER of 0.40% is in line with the market average (~0.35%).
Track Record
Launched in 2005-11-04, this fund has 20 years of history, long and reliable track record.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | +1.2% |
| 3 Months (est.) | – | +3.7% |
| 6 Months (est.) | – | +7.6% |
| YTD (est.) | – | +6.3% |
| 1 Year | +15.7% | +15.7% |
| 3 Years | +17.2% | +60.9% |
| 5 Years | +6.8% | +38.6% |
| Since inception (20y) | +13.2% | +1093.8% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
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About this ETF
The iShares UK Dividend UCITS ETF GBP (Dist) tracks the FTSE UK Dividend+ index. It is managed by iShares using physical replication and follows a distributing distribution policy. The fund is denominated in GBP and domiciled in IE. It has a total expense ratio (TER) of 0.40%.
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Frequently asked questions
What do IUKD's 0.40% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £4.00 a year and roughly £40 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
Is IUKD genuinely diversified?
Less so than the number of holdings suggests. FTSE UK Dividend+ weights its constituents by market capitalisation, so the largest companies make up a share of the fund far above their number, and that concentration deepens without any rule changing. The useful check is the weight of the top ten holdings, published monthly by iShares: that figure says how many companies the outcome actually depends on.
What should you re-check on IUKD once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of FTSE UK Dividend+, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
Does IUKD lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and iShares publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
Why does IUKD's Irish domicile matter?
Because it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. The Ireland-US treaty cuts withholding from thirty to fifteen per cent on US equities, mechanically worth several tenths of a point a year on a world index. The UCITS framework also brings the key information document in your own language.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.