For the year ahead, Alex Crooke from Henderson Global Investors expects global dividend growth to be a little bit slower in 2016 than it was in 2015.
Global dividends rose 2.2 percent to $218.4 billion in the first quarter of 2016, according to the latest Henderson Global Dividend Index (HGDI), an increase of $4.7 billion year on year. This pushed the HGDI to 158.8, its highest level in a year.
«Japan, North America, and Europe led the way, while the U.K., Asia, and emerging markets lagged behind,» Alex Crooke, Head of Global Equity Income at Henderson Global Investors said.
Exchange rates have been much more stable recently and so made a much smaller impact when translating global dividends into dollars. On an underlying basis, which adjusts for exchange rate movements, timing effects, one-off special dividends, and index changes, growth was 3.1 percent.
Additional Findings
- Special dividends doubled year on year
- Europe started the year very well, with headline growth of 10.8 percent; underlying growth was 3.6 percent
- Germany and France both saw good growth, while Spain saw declines.
- Swiss dividends fell slightly on a lower franc
- Henderson expects global dividends to rise 3.9 percent to $1.18 trillion in 2016, an underlying increase of 3.3 percent
This is slightly ahead of the HGDI’s $1.14 billion January forecast thanks to the effects of a slightly weaker dollar. This an increase of 3.3 percent in underlying terms, unchanged from the HGDI’s January forecast.
Weakness in Emerging Markets
«For the year ahead, we expect global dividend growth to be a little slower in 2016 than it was in 2015, with strong growth in Japan, North America and Europe partially offset by weakness in the U.K., Australia and emerging markets,» Alex Crooke said.
«Over the last six years, dividend growth in Europe has lagged far behind every other part of the world, as the prolonged effects of the global financial crisis and the protracted euro crisis that followed made it very difficult for companies to grow. The picture began to brighten considerably in 2015 and we are optimistic it will improve further in 2016,» Crooke added.
Stucked in the Doldrums
Thinking globally helped European investors continue to enjoy rapid dividend growth while their own countries were stuck in the doldrums. This approach diversifies risks, not only from a geographic perspective, but also from a sector one.