With bond yields compressing and USD15 trillion 1 in bonds now earning negative yields, equity income is now more important than ever. Equity is one asset class where investors can still find attractive potential yields. Even in Q2 2020 during a worldwide health crisis global equities paid out an aggregate almost USD400 billion2 in dividends. The universe of dividend-paying stocks is large and diversified, with a long history of growth. Continued demand for income as ageing societies save for retirement also incentivises companies to sustain their dividend pay-outs.
Investor guide to dividends
What are dividends and why do companies pay them to shareholders? What do dividend payments say about a company’s quality and governance standards? Do all companies issue dividends and if not, why not? Will economic challenges due to the global coronavirus pandemic impact companies’ ability to sustain dividend payments? What is the outlook for dividend payments in future and what are the that risks investors need to be mindful of?
We aim to answer these questions in simple, jargon-free language to equip readers with a greater understanding of dividend investing and the role it can play in a balanced portfolio.
To read our educational guide to dividend investing, please click on the button below.Investor Guide to Dividends
Funds in focus
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Unmasking the opportunity in dividends
Recent headlines may highlight cutbacks in pay-outs, but the global universe of dividend-paying stocks is vast and diversified with a long track record of growth.
The harsh economic fallout of a global coronavirus pandemic may seem a perverse time to highlight the benefits that dividend income can bring to investment portfolios.
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1Source: Bloomberg Barclays Global Aggregate Negative Yielding Debt, USD terms, 2 September 2020
2Source: Financial Times, Global dividends suffer worst quarterly fall since 2009, 24 August 2020. https://www.ft.com/content/a136da68-4cc8-489f-9265-a719b11f75e6