UPDATE: UK stocks are surging in 2025, with the FTSE 100 achieving its strongest annual performance since 2009. Investors are discovering lucrative opportunities as many British stocks remain undervalued, allowing for substantial second incomes—even with a modest investment of £5,000.
As of December 2025, there are 276 UK stocks offering a dividend yield of 4% or more. Notably, 112 of these are found in the FTSE 100 and FTSE 250, indicating that both large-cap and small-cap stocks are ripe for dividend harvesting. Some stocks are boasting astonishing yields as high as 22%, which could yield a phenomenal £1,100 income from a £5,000 investment overnight.
However, investors must tread carefully. Yields this high are often red flags, as evidenced by recent news from Petrotal, which has suspended shareholder payouts. But not all high-yield stocks are destined for a fall.
One stock currently drawing attention is Ashmore Group (LSE:ASHM), offering a whopping 10.4% dividend yield. If you invest £5,000 now, you could see an estimated passive income of £520. In comparison, a standard FTSE 100 index tracker would only generate about £154 for the same amount, making Ashmore a compelling choice for income-seeking investors.
Ashmore specializes in emerging markets, an area that most of its competitors overlook. Despite emerging market stocks performing well, investor sentiment is still cautious, leading to a capital outflow from its clients. This has resulted in a situation where Ashmore’s income from management fees is under pressure, raising concerns about its ability to sustain its high dividend yield.
Is a dividend cut on the horizon? Perhaps not. With a substantial cash buffer of £350 million, Ashmore is positioned to cover its £120 million annual dividends for several years. This offers management a critical window to reignite investor interest and improve its revenue streams.
Recent data suggests that Ashmore’s net outflows are decreasing, and assets under management are beginning to rise again. While there’s no guarantee of continued recovery, these trends hint that Ashmore’s attractive dividend yield might remain intact.
Investors are urged to watch Ashmore closely as developments unfold. If you’re contemplating investing £1,000 in Ashmore Group Plc, consider insights from investing expert Mark Rogers, whose flagship Motley Fool Share Advisor newsletter has guided numerous members toward successful stock recommendations.
With the potential for significant income, Ashmore could be a hidden gem in the current UK stock market landscape. Keep an eye on this stock as it may offer one of the best dividend opportunities in the FTSE 250 today.
For those looking to maximize their investments, the time to act is NOW. Don’t miss out on these developing opportunities in the UK stock market.
The post Urgent: Invest £5,000 in UK Stocks for a Potential £1,100 Income appeared first on The Motley Fool UK.
