2,000 dividends a month? How Plato is redefining the hunt for yield

Ask Australian investors what they’re looking for when it comes to income investments and the answers are remarkably consistent: a premium over term deposits, usually in the 5% to 9% range, with payments delivered monthly. Historically, the undisputed 'top of the pops' for sourcing this cash has been local ASX shares, celebrated for their generous payout policies and franking credits.

Dr Don Hamson, Founder of Plato Investment Management, has built a $25 billion funds management business primarily by feeding this hunger for ASX dividends. Yet, despite Plato's domestic pedigree, Hamson is entirely clear-eyed about the structural shortcomings of the Australian market.

Over the past decade, Plato has diversified into global equities, a segment that now represents roughly $7 billion of the firm's assets under management. The rationale for looking beyond our borders is simple, and according to Hamson, investors need look no further than Commonwealth Bank (ASX:CBA).

"CBA is trading on a cash yield of 3%," Hamson notes. "Sure, it's franked, so that puts it a squidge over 4%, but it's actually not that attractive."

Compounding the problem is severe concentration risk. CBA and BHP each comprise approximately 10% of the domestic index. Worse still, Australia's top seven dividend payers account for a staggering ~50% of all income paid out to investors.

"That's pretty damn concentrated," says Hamson.

To solve this, Plato recently launched the Plato Global Shares Income Fund - Active ETF (ASX: PGI2), providing ASX-listed access to its 10-year-old unlisted global income strategy. Debunking the myth that global equities are solely for growth, the strategy has delivered approximately 6% per annum of after-fee income distributed to investors monthly, along with a total return of 10% per annum.

More stocks. More dividends

When investors think of global equities, income rarely springs to mind. However, expanding the universe completely changes the diversification math. While the Australian market offers only about 300 stocks of true consequence, Plato actively tracks a deep pool of roughly 10,000 companies globally.

The sheer breadth of the global market creates a rolling stream of cash-flow opportunities that simply do not exist domestically. In Australia, the corporate calendar creates distinct "dividend deserts" outside of the traditional semi-annual reporting seasons.

Globally, the spread of dividend ex-dates is vastly superior.

"Some months you’ve got like 2,000 stocks paying a dividend," Hamson points out. "You're lucky to get 50 in Australia."

This continuous distribution schedule allows active investors to harvest yield year-round.

Plato’s high-turnover approach

Chasing headline yields is a notorious hazard in income investing, often exposing investors to capital destruction via "dividend traps", which are companies boasting high yields only because their share prices have collapsed.

To bypass this risk, Plato avoids a naive "high-yield-only" mandate. Instead, it deploys a dual-layered strategy that blends permanent growth holdings with an aggressive, high-turnover rotation framework.

• The permanent core (20% to 40%): Plato holds lower-yielding, high-quality stocks purely for total return and capital growth.
• The rotational satellite: The fund aggressively rotates the remaining capital into and out of stocks to capture dividends around their ex-days.

Because the strategy's target audience is largely pension-phase retirees, they face minimal friction from capital gains tax, freeing the team to execute a high-turnover trading plan.

Crucially, Hamson highlights a structural inefficiency in Europe that plays perfectly into this model:

"A great opportunity in a global portfolio is that a lot of continental European companies actually only pay one dividend a year. So I can get the whole yield, and it might only be 3% or 4%, but I get the whole yield and only own it for a month."

By compressing a full year’s worth of yield into a multi-week holding period before moving capital to the next target, Plato manufactures a consistent ~6% annualised payout without sacrificing long-term portfolio quality.

Where the income is flowing

Looking ahead, Hamson emphasises that global diversification will be crucial to shield portfolios from geopolitical wildcards:

"Given that none of us know what Trump's going to do next, diversification is important to bolster you from that."

Tactically, Plato is currently favouring two distinct global themes:

1. European Banks

While local income mainstays like CBA are being bypassed due to compressed yields, Plato is finding immense relative value across the European financial sector.

"There are actually some attractive European banks that have a cash yield, no franking, but a cash yield that's significantly higher than CommBank's yield," Hamson reveals. 

"We're also very short-term. So we're not there for two years. We might be there for two months."

2. Global Defence Stocks

Rather than holding defence for immediate yield, Plato treats this sector as an engine for total return. Ongoing geopolitical friction has forced governments worldwide, particularly in Europe, to radically ramp up structural military spending.

"Defense stocks have very good medium-term growth perspectives... There’s been a lot of missiles, anti-missiles, and drones. There is going to be some pretty good revenue from people that make a lot of those defense systems."

Managed Fund

Plato Global Shares Income Fund

Global Shares

View

The Fund is also available as an Active ETF – accessible for investment on the ASX under the ticker ASX: PGI2.