Today, Fri 31st July, Lloyds Banking Group [http://www.lloydsbankinggroup.com/] is going to pay a dividend of £0.0075.
Yes, 0.75p per share.

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10056&action=]

A dividend yield of 0.9%.

How much cash will this dividend cost Lloyds Banking Group ?

[http://www.lloydsbankinggroup.com/investors/share-price-info/detailed-share-price/]

71454.656 million shares in circulation.

Thus: 71454.656 x 1,000,000 x £0.0075 = £535,909,920

Yes, £535 million is the cash payment that Lloyds will make to the shareholders.

Just to remind us, HM government owns 14.98% of the Bank:

[http://hsprod.investis.com/servlet/HsPublic?context=ir.access&ir_option=RNS_NEWS&item=2133305960955904&ir_client_id=1503]

So HM Government will get £80.2 million from the dividend.

The Wellcome Trust is a global charitable foundation dedicated to improving health by supporting bright minds in science, the humanities and social sciences, and public engagement.

www.wellcome.ac.uk

Sir Henry Wellcome (1853-1936), was the founder of the The Wellcome Trust. Today, its annual spend on research increased from an average of £28 million in the 1980s to £650 million in 2007.

Total public equities £9,546m
Long/short hedge funds £1,073m
Cash £639m
Absolute return & buy-out £2,532m
Growth & venture £3,579m
Property & infrastructure £2,011m

The Trust’s £18.0 billion investment portfolio provides the income for its funding. In 2014 Trust’s spend on medical and scientific research was £674 million based on its investment income. Long-termism is fundamental to the thinking of the Wellcome Trust. Directly held investments now account for 42% of its investment portfolio. A landmark transaction this year was the purchase of Farmcare from the Cooperative Group Ltd, which at a stroke made it the largest lowland arable farmer in the UK.

It holds £2 billion in property investments, of which  is made up of residential interests of £1.2 billion, focused in super-prime London, such as the South Kensington estate. They hold 1,720 apartments in South Kensington, which is generating a “a nice little earner from the rent”.

Apple the computing pioneer has an incredible balance sheet.

[http://files.shareholder.com/downloads/AAPL/485763627x0x789040/ED3853DA-2E3F-448D-ADB4-34816C375F5D/2014_Form_10_K_As_Filed.PDF]

Looking at the 2014 annual report, on page 24 one can see the cash holds:

$155,239 million = $155.2 billion

Today that figure is actually $178 billion = £114 Billion.

That is approximately the about the same as how much the UK Government borrows each financial year to finance the budget deficit.

Norway is one of the world’s richest nations.
The reason for its huge wealth is down to its oil and the careful investment management of the money.

Norway set up a fund to manage its oil wealth, it is called the Government Pension Fund Global, sometimes known as Norway’s Sovereign Wealth Fund. It started this fund, in 1995, that is only 20 years ago.

http://www.nbim.no/en/the-fund/

The figures are incredible.

Over 7000 Billion Norwegian Krona = £560 Billion Pounds.

That is about 35% of the total annual GDP of the UK.

60% is held in Equities
35% in Bonds
5% in Property

Caledonia Investments is a £1.3 Billion London listed Investment Trust.

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10152]

Its juicy dividend is 2.1% in these near Zero interest rate times.

[http://www.caledonia.com/]

it’s wealth comes from the Cayzer family who built their wealth from shipping and protected there wealth by creating the Caledonia Investment Trust, which today is 48.5% owned by the Cayzer family.

The top ten holdings are:

Capital Today China (Private equity fund)
Park Holidays (Caravan parks operator)
Cobehold (Investment company)
TGE Marine (LNG engineering)
AG Barr (Soft drinks)
Bristow Group (Helicopter services)
The Sloane Club (Residential club)
Choice Care Group (Care homes provider)
Close Brothers (Financial services)
Polar Capital (Fund manager)

The top ten holdings equate to £664m.

Also the share price of Caledonia Investments is running at a discount, of about 14%. This means you are buying £1 worth of assets for 86p.

Not a household name, but Aerion Fund Management is the former investment arm of British Gas, that used to manage the pension contributions of the workers of British Gas, and then after many de-mergers and acquisitions at British Gas (British Gas, Lattice Group, Transco…..) the investment arm has become the fund management arm of the National Grid pension fund.

http://www.aerionfm.com/

The total funds under management amounted to £17.3 billion.

6 asset classes are where the monies are invested:

7% in Alternatives
7% in Property
18% in Equities
3% in Private Equity
1 % in Cash
64% in Bonds

As one can see nearly 2/3rd of the fund are in fixed income (bonds). Which one can understand, when the fund has to pay out each month to the former workers (pensioners) of National Grid and British Gas, it needs investments that pay out a fixed income, thus bonds.

The FTSE-100 is the flagship index of the largest UK Companies.
Famous names like HSBC, BP and BT the most dynamic telecommunications group in the world, to name just three from the one hundred that make up the FTSE-100.

A fund that invests in the FTSE-100 in the Legal & General FTSE-100 Tracker:

[http://i.legalandgeneral.com/consumer/investments/products-and-funds/index-tracker/investments-productsandfunds-indextracker-fund-uk100.jsp]

This fund has £280million invested in the UK’s top 100 firms.

What is interesting to see, in the climate of 0.5% interest rates, by investing ones money in this fund, you get a yield of about 2.5%.

The top ten holdings are:

HSBC Holdings 7.09% of the fund
BP 4.73% of the fund
Royal Dutch Shell ‘A (Dutch listing)’ 4.34% of the fund
GlaxoSmithKline 4.09% of the fund
British American Tobacco 3.9% of the fund
AstraZeneca 3.45% of the fund
Vodafone 3.25% of the fund
Royal Dutch Shell ‘B’ 3.21% of the fund
Diageo 2.70% of the fund
Lloyds Banking Group 2.46% of the fund

What you see is that that the FTSE-100 is dominated by HSBC what makes up 7% of the index then the two Shell’s (one company, two classes of shares for Dutch tax reasons), and Shell is (4.34% + 3.21%) and then followed by BP that makes up 4.73%.

These 9 companies make up 39.22% of the FTSE-100. Yes, 9 companies account for nearly 40% of all the index.

The former industrial and chemical giant, and a former member of the FTSE-100 was Imperial Chemical Industries, known as ICI.

Today ICI has vanished but its legacy lives on, in the name of AstraZeneca, the pharmaceuticals are of ICI that was spun out from by its demerger to create Zeneca and the rest of the business was sold to Ineos and the remaining business such as Dulux, Polycell and Hammerite was sold to the Dutch chemicals company AzkoNobel.

The pension fund is still supporting former workers of ICI.

http://www.icipensionfund.org.uk

With assets of £8,602million  = £8.602 Billion.

The fund has to support:

417 Contributing members
47,586 Pensioners
9,816 Deferred pensioners

The £8.6 billion is managed by these fund managers:-

Alinda Capital Partners LLC
Ashmore Management Company Limited
BlackRock Advisors (UK) Limited
Genesis Investment Management LLP
Insight Investment Management (Global) Limited
Intermediate Capital Managers Limited
M&G Investment Management Limited
PIMCO Europe Limited
Rogge Global Partners Plc

The money is split across these asset classes:-

Liability linked Investments
Developed Market Equities
Emerging Market Bonds
High-Yield & Other Global Bonds
Leveraged Loans
Emerging Market Currencies
Infrastructure
Property

What is very interesting when one reads the small print of the pension fund of ICI, when ICI was bought, AkzoNobel guaranteed all ICI’s pension obligations.

The Kuwait Investment Authority is the investment arm of the government of Kuwait.It is the world’s first and oldest sovereign wealth fund

http://www.kia.gov.kw/En/Pages/default.aspx

The Kuwait Investment Authority was founded in 1953 to manage the money and income from the Kuwait Government’s financial surpluses after the discovery of oil.
It is thought too hold over £192 Billion  = US$300 billion of assets, and is thus is one of the largest Sovereign Wealth Funds in the World.

The wealth of Kuwait comes from it’s oil exports.

By looking at the BP Statistical Review of Energy

[http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-world-energy.html]

Kuwait  produces 3,126,000 barrels of oil a day.

Thus, with oil at $60.55 per barrel = £38.79.

3,126,000 x £38.79 = £121,266,292

Yes, Kuwait’s crude oil generates £121million a day. One can now see where the money flows into the Kuwait Investment Authority for it investment operations.

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.

In June 2015, the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement.

There were “only” 3 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-

11-Jun-2015 3½% Treasury Gilt 2045 £2,199.9520 Million
09-Jun-2015 1/8% Index-linked Treasury Gilt 2024 £900.0000 Million
02-Jun-2015 2% Treasury Gilt 2025 £3,250.0000 Million

When you add the cash raised:-

∑(£2,199.9520 Million + £900 Million + £3,250 Million) =  £6,349.95 Million

£6,349.95 Million = £6.3495  Billion

On another way of looking at it, is in the 30 days in June, HM Government borrowed:-

£211 million each day for the 30 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature 2024, 2025 & 2045. All long term borrowings, we are mortgaging our futures, but at least “we are in it together…”

Lindsell Train Investment Trust PLC is a £100m investment trust, run by Lindsell Train.
[http://www.lindselltrain.com/]

Its holdings are:-

Lindsell Train Limited
Barr (AG)
Diageo
Lindsell Train Japanese Equity Fund
Unilever
Nintendo
London Stock Exchange
Pearson
Heineken
2.5% Consolidated Loan Stock
Reed Elsevier
eBay
Treasury 2.5%
Finsbury Growth & Income Trust
Lindsell Train Global Equity LLC
Mondelez International
Kraft Foods

Interesting to see the investment trust also owns a large percentage of the fund manager itself. Thus has “skin in the game”.

A yield of 1.3%

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=31089]

Interesting to see who are the major shareholders:-

Rathbone Investment Management Limited
Brewin Dolphin Limited
Hargreaves Lansdown Asset Management Ltd
Alliance Trust plc
Mr N Train
Mr M Lindsell
Finsbury Growth & Income Trust PLC
Mr D Caldecott
Troy Asset Management Limited

Mr. Train and Mr. Lindsell both significant shareholders, again showing they are putting their money where there mouth is. Putting their own money into the fund, so their personal wealth is tied up in the future prospects of the fund.