Asia and Emerging Markets Had the Worst Dividend Growth Rates for 1Q2014 (FE Trustnet)
FE Trustnet says that according to the latest Henderson Global Dividend Report, emerging market and Asian markets suffered the worst dividend growth rates in the first quarter of 2014. Dividends grew just 7% in emerging markets and 5.7% in the Asia Pacific region verses 15% in the UK and 30.2% in the US. The report warned:
“The major emerging market currencies have been weak against the US dollar, with the Brazilian real, Indian rupee, South African rand and Russian ruble all down 10-15 per cent… A slowdown in the underlying growth of dividends from emerging market companies is therefore compounded by falling exchange rates. …We are cautious on emerging markets as sources of income this year.”
Emerging markets are also three times more likely to use special dividends or one-off payments over and above the regular dividends that imply no commitment to future payouts plus the dividends in these regions are three times more variable than the developed world with the least variable markets being the UK and Canada.
Nevertheless, the Henderson Global Dividend Report report still concluded that that investors should hang on to their Asian and emerging markets funds in the interest of diversification.
To read the whole article, Which regions have the fastest- and slowest-growing dividends of 2014?, go to the website of FE Trustnet.