The slowdown in global dividends is underway – but the dividends still grew on a headline basis throughout the third quarter, according to fund manager Janus Henderson Investors.
On a headline basis, global dividends grew by 2.8% reaching a total of $355.3 billion (€416.4 billion). Dividends were up 5.3% in underlying terms, according to the firm’s latest Global Dividend Index.
The slowdown of growth began in the second quarter and continued into the third. Despite their slower pace, dividends are still growing comfortably, Janus Henderson said.
US dividends reached an all-time high for the index: up 8% on an underlying basis. European dividends rose 7%.
Chinese dividends showed signs of weakness, increasing by 3.7% year-on-year on an underlying basis. If it wasn’t for oil and gas company Petrochina’s large increase, total dividends would have been lower, the fund manager said.
Jane Shoemake, investment director of global equity income at Janus Henderson Investors, said: “A softening global economy is beginning to have an impact on corporate earnings and, in turn, on dividends.”
She added: “For next year, slower profit growth will impact dividends but with interest rates at their current low levels, equities will continue to provide a valuable source of income for investors, even if the rate of dividend growth is less eye-catching than in the recent past.”
Separate research recently showed that fund managers were more confident about the global economy.
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