Not all global equities are created equal

Paul Hennessy

Capital Group

Australians need to look further afield for additional sources of income as they live longer. In particular, global equities that pay and grow dividends over time have the potential to address investors’ challenges of managing both market and longevity risk in retirement. Dividend growers have a unique profile. From 1989 to 2014, global dividend growers delivered an annualised total return of 10.3% in USD terms while the broader market returned 8.5%. Dividend growers outpaced stocks that did not pay dividends (4.5%), stocks that initially paid dividends but then cut them (5.9%), and stocks that paid constant dividends (7.7%). Over the same period, dividend growers posted lower volatility compared with the global universe. Their returns were more resilient than the broader market’s in periods of downturn. On average, dividend growers captured just 85% of the market’s downside. By comparison, steady dividend payers captured as much as 97% of the market’s downside. The bottom line is: global dividend growers have the potential to deliver superior long-term returns and lower volatility, and an income stream. Read more: (VIEW LINK)


Paul Hennessy
Managing Director, Capital Group - Australia
Capital Group

Paul Hennessy is managing director, Australia & New Zealand, at Capital Group. As a relationship manager, he is responsible for covering the institutional client base in Australia and New Zealand. He has 33 years of investment industry experience...

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