For individual investors in the UK

Global dividends surge to a new record in second quarter of 2022

According to the latest Janus Henderson Global Dividend Index, global dividends surged 11.3% to an all-time quarterly high of $544.8 billion in Q2 2022. Client Portfolio Manager Jane Shoemake discusses the key drivers.

Jane Shoemake, ASIP

Jane Shoemake, ASIP

Client Portfolio Manager


25 Aug 2022
1 minute watch

Key takeaways:

  • Global dividends have surpassed pre-pandemic levels and are now only 2.3% below the long-term trend. 94% of companies in our index either increased dividends or held them steady.
  • The strong Q2 figures follow a profitable 2021 when companies enjoyed rising sales and expanding profit margins on the back of soaring post-pandemic demand.
  • On a sector level, oil, financials, and auto manufacturers were the key contributors to Q2 dividend growth, while Europe and the UK were the primary regional drivers.

Janus Henderson Global Dividend Index

Jane Shoemake: Q2 was a record quarter for dividend payments around the world. Global payouts of $545 billion US dollars were 11% higher year-on-year on a headline basis, though the underlying growth rate was considerably faster at 19% once a combination of factors, including the exceptional strength of the US dollar, were taken into account.

The post-pandemic rebound has been so strong that global dividends have now surpassed their pre-pandemic levels. Europe and the UK were key drivers in the second quarter, delivering dividend growth almost a third higher on an underlying currency basis. Higher banking dividends, enabled by the relaxation of central bank constraints, and larger payouts from German car manufacturers, contributed significantly to this growth.

Looking more globally, oil companies contributed most to dividend growth, helped by rising energy prices. Given this record quarter, we are now expecting 2022 payouts to reach $1.56 trillion, up from our previous estimate of $1.54 trillion and equating to underlying growth this year of 8.5%.

 

Past performance does not predict future returns. Investing involves risk, including the possible loss of principal and fluctuation of value.

Unless otherwise stated, all data is sourced by Janus Henderson Investors as of 30 June 2022.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

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    Specific risks
  • Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • The Fund may use derivatives with the aim of reducing risk or managing the portfolio more efficiently. However this introduces other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
  • If the Fund holds assets in currencies other than the base currency of the Fund or you invest in a share/unit class of a different currency to the Fund (unless 'hedged'), the value of your investment may be impacted by changes in exchange rates.
  • Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
  • Some or all of the ongoing charges may be taken from capital, which may erode capital or reduce potential for capital growth.
  • The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
    Specific risks
  • Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • Shares of small and mid-size companies can be more volatile than shares of larger companies, and at times it may be difficult to value or to sell shares at desired times and prices, increasing the risk of losses.
  • If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
  • This Fund may have a particularly concentrated portfolio relative to its investment universe or other funds in its sector. An adverse event impacting even a small number of holdings could create significant volatility or losses for the Fund.
  • The Fund may use derivatives with the aim of reducing risk or managing the portfolio more efficiently. However this introduces other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
  • When the Fund, or a hedged share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency, the hedging strategy itself may create a positive or negative impact to the value of the Fund due to differences in short-term interest rates between the currencies.
  • Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
  • Some or all of the ongoing charges may be taken from capital, which may erode capital or reduce potential for capital growth.
  • The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
    Specific risks
  • Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • Emerging markets expose the Fund to higher volatility and greater risk of loss than developed markets; they are susceptible to adverse political and economic events, and may be less well regulated with less robust custody and settlement procedures.
  • If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
  • This Fund may have a particularly concentrated portfolio relative to its investment universe or other funds in its sector. An adverse event impacting even a small number of holdings could create significant volatility or losses for the Fund.
  • The Fund may use derivatives towards the aim of achieving its investment objective. This can result in 'leverage', which can magnify an investment outcome and gains or losses to the Fund may be greater than the cost of the derivative. Derivatives also introduce other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
  • If the Fund holds assets in currencies other than the base currency of the Fund or you invest in a share/unit class of a different currency to the Fund (unless 'hedged'), the value of your investment may be impacted by changes in exchange rates.
  • Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
  • Some or all of the ongoing charges may be taken from capital, which may erode capital or reduce potential for capital growth.
  • The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
Jane Shoemake, ASIP

Jane Shoemake, ASIP

Client Portfolio Manager


25 Aug 2022
1 minute watch

Key takeaways:

  • Global dividends have surpassed pre-pandemic levels and are now only 2.3% below the long-term trend. 94% of companies in our index either increased dividends or held them steady.
  • The strong Q2 figures follow a profitable 2021 when companies enjoyed rising sales and expanding profit margins on the back of soaring post-pandemic demand.
  • On a sector level, oil, financials, and auto manufacturers were the key contributors to Q2 dividend growth, while Europe and the UK were the primary regional drivers.