AIM UK

[ls7550]

22% indicated cash reserves

FT All-Share (2075) dividend yield currently 5.48%
FT100 (4079) dividend yield 5.62%

Historically peaks of 8% dividend yield and above have occurred, which implies such WILL occur again at some point in time (maximum historic yield was in the 1970's when an exceptional extreme of 12%+ was recorded).

Remaining cash reserves provides cover for a further 26% downside in FT100, which would lift dividend yield to 7.63% levels, beyond which we'd have to ride through any further declines fully loaded.

Recent times have seen cash as the relative outperforming asset class as stock prices have declined and wiped out years of excess stock returns within a short period of time.

This is the true nature of a AIM like style - for periods we relatively under-perform, but then narrow or reverse that gap as stock prices decline. When the two converge (or better) dumping cash reserves into stocks at bargain price levels results in subsequent relative out-performance through having cost averaged into more stocks for the same capital amount. The additional dividend yield also adds to that benefit.