Since 2000, emerging markets (EMs) dividends have grown twice as fast as those in the rest of the world [1].

Underpinned by strong corporate fundamentals and an expanding investment universe, we believe EMs offer a compelling long-term investment opportunity for clients seeking to generate both income and growth.

Our ‘follow-the-cashflow’ analysis, focusing on companies with robust balance sheets and attractive fundamentals, means we are always alert to opportunities in cash-generative businesses capable of paying out sustainable and growing dividends to shareholders.

How does this look in practice?

Take Kaspi. Based in Kazakhstan, the company represents the microeconomic development of 'technology as a platform' and is largely responsible for the country’s digitalisation. Kaspi operates an online payments, marketplace and fintech ecosystem that has changed how people pay, shop and manage their finances.

The business continues to evolve and has added components to its super app, including travel services and groceries. Kaspi is aligned with all of Kazakhstan’s key merchants, and its scale allows it to offer a wide range of convenient services at reasonable and affordable rates. In turn, this allows the company to generate supernormal returns – and the company’s management is willing to distribute those returns to shareholders.

We think that Kaspi remains undervalued, perhaps because of Kazakhstan’s proximity to Russia. However, our political risk assessment suggests Kazakhstan appears to be a major beneficiary of immigration flows from Russia. We estimate that Kaspi’s earnings could achieve a 30% compound annual growth rate over the medium term, as the business continues to expand its services and add more premium features.

Kaspi has a dividend yield of between 7% and 9% [2], representing an appealing income stream relative to other asset classes.


Korea Shipbuilding & Offshore Engineering (KSOE) is one of the world’s largest shipbuilders. We believe it stands out against its peers. The firm’s balance sheet has proved capable of withstanding lengthy downturns, and its focus on research and development puts it at the forefront of major industry changes.

During 2023, the firm received $21.8 billion of new orders, representing 150% of its annual target. And, with an order backlog equivalent to more than three years’ current revenues, the company will be kept busy in production for some time [3].

With the increasing importance of sustainability and ESG factors on market pricing, many investors shun high-carbon industries like shipping.

However, KSOE is undoubtedly playing a lead role in the green energy transition. During the Covid-19 downturn, it invested heavily in research and development in new lower-emission ships. This has already started to show results. The firm recently successfully commercialised its first ammonia-powered vehicle, securing a contract with a European shipping company for four mega-sized carriers worth 557 billion South Korean won ($432.4 million) [4]. According to KSOE, these carriers reduce CO2 emissions by up to 95%.

Based on current valuations, investors don’t appear to be taking this green replacement cycle into account. But with the credible support of the International Maritime Organization, we believe orders for new eco-friendly ships will increase over the next few years.

The firm doesn’t currently pay a dividend, preferring in recent years to reinvest in growing the business. That said, we have carefully considered two aspects when looking at KSOE’s income credentials. The company's ability to pay a sustainable dividend and its willingness to do so. We believe KSOE qualifies on both counts.

Driving success

India’s Bajaj Holdings' prospects are closely entwined with India’s burgeoning middle class.

Based in Pune, Maharashtra, the company’s two businesses reflect the growing financial strength of the Indian consumer. Bajaj Auto is a leading manufacturer of two and three-wheeler vehicles, while Bajaj Fin Serve is a consumer finance company.

Bajaj Auto’s vehicles are competitively priced. Most importantly, the company has invested in the durability of its products, which tend to hold their value better than those of competitors. Bajaj has also expanded into other geographical markets, such as Africa and Latin America, with exports comprising around 40% of the company’s total sales [5].

The next generation of transportation – electric vehicles – should also be a major positive for the company. According to McKinsey, Indian demand for small-format e-mobility (which includes motorbikes, scooters and three-wheelers) could rise to about nine million units by the 2030 financial year.

From small beginnings, Bajaj FinServe and its subsidiary, Bajaj Finance, have branched out into providing more substantial loans, mortgages and insurance. Over time, we expect the non-bank financial institution to take a larger market share, especially from Indian state-owned banks.

The key to success for any financial institution is identifying a healthy customer base and pricing the level of risk into the interest rates it offers. Bajaj Finance has proved highly adept in this department. A second real positive is the company’s leading role in digitalisation. It has forged ahead with new digital initiatives, including a personal loan app, to expand the availability of its products.

What does all this mean for equity income investors? Bajaj Holdings' dividend yield today, based on our initiation price, is 13.02% [6]. As investors, we look for healthy businesses that can generate attractive income streams, pay some of that income to shareholders as a dividend, and show the potential to grow that dividend over time. We think Bajaj Holdings ticks all our boxes.

Final thoughts…

EMs offer a dynamic and fertile landscape for discerning investors focused on income and total returns. The examples above underscore the depth and diversity of opportunities that await active engagement. As these markets continue to evolve, fuelled by robust economic growth and increasing market sophistication, the potential for generating attractive returns can only grow.



Companies are selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance. The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not a guide to future results.  


  1. Factset, Jefferies Equity Research, December 2022
  2. Source: Kaspi, January 2024 
  3. Source: HD Korea Shipbuilding & Offshore Engineering (KSOE), December 2023
  4. Source: Korea JoongAng Daily, December 2023
  5. Reuters, October 2023 
  6. Source: abrdn. Bloomberg, December 2023. For illustrative purposes only. No assumptions regarding future performance should be made