In addition, investors need to remain mindful of risk. While stocks are cheaper than bonds, equities generally come with more volatility. Today the case for equities as a dividend source comes down to relative value: Stocks are cheaper than bonds while simultaneously providing some upside potential.
The bottom line: For investors looking for income, international and global dividend funds are still a reasonable choice, at least given the alternatives.
Sources: BlackRock, Bloomberg
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.
There is no guarantee that dividends will be paid
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries.