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Passive index investing‘s grown in popularity in recent years and I can certainly see the appeal. It’s low-cost, minimal hassle and can produce a respectable second income if the index pays a decent yield.
The FTSE 100‘s known for its high dividends. So how much could I expect to get back each year if I put the entire £20k annual Stocks and Shares ISA into a tracker fund? Let’s take a look.
Footsie figures
The current FTSE 100 dividend yield’s 3.56%. This is based on the current share prices and the total dividends declared by the constituents in the previous 12-month period.
However, this doesn’t include special dividends. These are when a firm has excess cash (from say an asset sale or exceptional earnings) it wants to distribute to shareholders. They tend to be one-off payments. For example, I got a special dividend from HSBC in June following…
