Investors hit by double trouble with shares

Shareholders are having to absorb a double hit through falling yields on dividends and tumbling share prices. The data services company Markit has revealed that dividend yields on FTSE 100 shares have fallen from 6.12 per cent to 5.85 per cent in the past year, despite a 31 per cent fall in the index.

Ryan Bransfield, an analyst at Markit, said: "Yields have largely fallen as companies rebase their dividends at a lower level." Yields, calculated as a proportion of the trading price, typically rise as shares fall, but companies have taken a sword to their dividends. Twelve FTSE 100 companies axed their dividend in the first quarter of 2009.