For individual investors in the UK

The Global Story for Profit and Income: How Asia Pacific beat the world

Mike Kerley

Mike Kerley

Portfolio Manager


Sat Duhra

Sat Duhra

Portfolio Manager


28 Jun 2021

During the world’s worst crisis since the second world war, profits and dividends in Asia were remarkably resilient compared to the rest of the world. Building on the last three editions of research tracking the trends in dividends paid by companies listed across Asia Pacific, the latest edition of the Henderson Far East Income Dividend Index has enhanced its analysis with the inclusion of research on profits and dividends globally – highlighting how Asia is increasingly becoming a powerhouse. Whether we look at profit, cash balances, net debts, or cash flow, the region’s companies are showing that the fast-growing dividends they are paying are extremely well supported by fundamentals.

  Key takeaways:

  • Dividends in Asia were much more resilient than expected - falling by 5.6% in 2020, compared to a 9.3% decline for the rest of the world.
  • Asia Pacific ex Japan has beaten the rest of the world in the profit race, over the last one, three, five, and ten years. In 2020, profits from Asia made up 36% of the global total, up from just 23% a decade earlier.
  • Whether we look at profit, cash balances, net debts, or cash flow, the region’s companies are showing that the fast-growing dividends they are paying are extremely well supported by fundamentals.

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.

 

Marketing Communication.

 

Glossary

 

 

 

Important information

Please read the following important information regarding funds related to this article.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions. Henderson Far East Income Limited is a Jersey fund, registered at Liberté, 19-23 La Motte Street, St Helier, Jersey JE2 4SY and is regulated by the Jersey Financial Services Commission] Ref: 34V
    Specific risks
  • The Company has significant exposure to Emerging Markets, which tend to be less stable than more established markets and can be affected by local political and economic conditions, reliability of trading systems, buying and selling practices and financial reporting standards.
  • If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio diversified across more countries.
  • The portfolio allows the manager to use options for revenue enhancement purposes. Options can be volatile and may result in a capital loss.
  • Where the Company invests in assets which are denominated in currencies other than the base currency then currency exchange rate movements may cause the value of investments to fall as well as rise.
  • This Company is suitable to be used as one component in several in a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested into this Company.
  • Active management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times.
  • The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
  • Shares 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 return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result losses (or gains) may be higher or lower than those of the Company's assets.
  • The Company may use gearing as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incured by the Company can be greater than those of a Company that does not use gearing.
  • All or part of the Company's management fee is taken from its capital. While this allows more income to be paid, it may also restrict capital growth or even result in capital erosion over time.