Global dividends are set to fall by at least 15% this year as the Covid-19 pandemic takes its toll on company profits, according to a report by fund manager Janus Henderson Investors.
Dividend pay-outs rose 3.6% in the first quarter but there will be minimum 15% fall in the rest of the year equal to $213 billion, with pay-outs eventually totalling $1.21 trillion (€1.1 trillion).
This would be the best-case scenario, said the fund manager, whose Global Dividend Index forecasts that North American dividends are likely to be less affected than in Europe and the UK, while Asia is likely to see a minor impact this year – but experience more damage in 2021.
A worst-case scenario holds the possibility of shareholder pay-outs falling by 35% to $933 billion.
In general banks and discretionary consumer sectors are the worst hit, while technology, healthcare, food and most basic consumer sectors should be safer, the firm said.
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