Eve Maddock-Jones, Reporter, Trustnet, 14 January 2022:
Income investors focusing solely on the UK market could be left behind in the coming decade and would miss out on the highest-paying region, research by Trustnet has found.
The UK has been a stalwart of income investing for years, with several well-known and high-paying dividend companies such as Shell, BT and Rolls Royce, dominating the market…
But when taking the dividend growth rate into consideration Trustnet found that the UK may not be the best option over 10 years.
Using data provided by Hargreaves Lansdown, we calculated the average 10-year dividend growth rate for each of the six regions over the past decade…
If each dividends continued to grow at the same rate for the next decade, by 2032 investors would have made more from the emerging markets…
UK dividends were hit by the hard by the pandemic as companies cancelled, cut or suspended their payouts in an effort to conserve cash, forcing investors to look elsewhere.
Companies in emerging markets however had relatively lower debt – in some regions – and were able to manage the lack of revenue more easily and maintain dividends…
Examining the emerging market income funds on offer, Wall highlighted the Jupiter Asian Income fund, which she said had an “experienced and talented manager” in Jason Pidcock and would act as a “good diversifier” for any income portfolio…
Another option is the Jupiter Emerging and Frontier Income, which offers the highest yield in the IT Global Emerging Markets sector at 4.4%.
James Carthew, head of investment companies at QuotedData, said that the fund’s lead manager, Ross Teverson, is confident about the outlook for several niche emerging markets post Covid, including Mexico, emerging Europe, large parts of Africa, and Pakistan.
“Many of those areas would not feature much in most emerging markets portfolios but find a place in a true stock picking fund like this one,” he said. The analyst also picked the trust as his income pick for 2022, backing it as a strong option for the coming year, especially if sentiment towards emerging markets takes a positive turn.”
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