Held in our WS Canlife Diversified Monthly Income Fund, WS Canlife UK Equity Fund, WS Canlife UK Equity Income Fund and WS Canlife UK Equity & Bond Fund portfolios, online trading group IG Group has maintained a leading position in the well-received services through its advanced online platform.
For us, a core strength of IG Group lies in its shareholder-friendly approach, underpinned by a reliable and attractive dividend that makes it notable among UK-listed opportunities for income-seeking advisors. This income stream reflects the company's robust balance sheet and disciplined capital allocation. In a climate where consistent income is highly valued, we consider that IG stands out for distributions over the last 20 years.
In our view, the group’s business model is well-aligned with periods of heightened volatility. Events such as tariff-related policy changes have historically triggered a surge in trading activity, driving higher revenues as investors seek to respond swiftly to price dislocations. We believe that IG's ability to monetise such conditions is a key differentiator, supporting earnings momentum when markets are unsettled.
From a long-term perspective, IG Group benefits from a diversified revenue base and a global trading footprint, offering a stable foundation for growth. Ongoing investment in technology and risk management supports operational resilience, positioning the firm to adapt quickly to market shifts while protecting profitability. For us, this dual emphasis on short-term performance and long-term value creation enhances its appeal in a crowded investment landscape.
However, IG Group does face regulatory and operational risks. Heightened regulatory scrutiny in key markets like the UK, Australia and the US could lead to heavier capital requirements or constraints on product offerings. Furthermore, if global equity and FX markets settle into a prolonged low-volatility regime, trading volumes (and thus revenue) could disappoint, while ongoing competition from both traditional brokers and fintech startups may erode market share and compress margins. IG group recently acquired UK fintech startup Freetrade, a mobile trading platform targeting retail clients, in a bid to build in areas where it sees potential competition. In summary, we believe that IG’s proven track record, healthy dividend, and capacity to capitalise on market stress make it a strong contender for ‘Stock of the Month’ recognition. In an era of persistent uncertainty, we believe that IG offers a rare blend of stability and growth, making it a strategic holding for diversified portfolios.
Important Information
Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested.
Due to the underlying assets held in the WS Canlife UK Equity Income Fund, the price of the fund is classed as having above average to high volatility.
The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice.
This document is issued for information only by Canada Life Asset Management. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at https://www.canadalifeassetmanagement.co.uk/