Though the impact of the pandemic is still rippling through the markets, some normalcy is returning. Global dividend payouts are expected to return to their pre-pandemic peak level by the end of December, according to Janus Henderson.
Three important things changed during the third quarter. First and most importantly, mining companies all around the world have benefited from sky-high commodity prices. “Many of them delivered record results and dividends followed suit,” said Janus Henderson client portfolio manager Jane Shoemake. Shoemake continued, “Secondly, banks took quick advantage of the relaxation of limits on dividends and restored payouts to a higher level than seemed possible even a few months ago. And finally, the first few companies in the US to start the annual dividend reset showed that businesses there are keen to return cash to shareholders.”
Payouts rose at record pace in the third quarter, though notably, countries that refrained from cutting back in 2020, such as the U.S., saw less growth. Chinese companies are on track to deliver record payouts.
An ETF to Play to Take Advantage of Record Growth
Investors looking for tap into the growth opportunities available in Asian companies could look at the SmartETFs Asia Pacific Dividend Builder ETF (ADIV). Though Asia is not historically noted as a region where companies focus much on payouts, as China has become a more central country in the global economy, dividends are starting to become in fashion. In Today UK News, Nick Clay, portfolio manager of the RWC Global Equity Income, explained that “the world’s becoming far more balanced with regards to where you can find income.”
With a lower baseline, the potential for dividend growth is enormous. ADIV doesn’t just offer exposure to China, it also includes holdings from surging economies like India and the burgeoning tech giant Taiwan.
ADIV has an expense ratio of 0.78% and a dividend yield of 2.86%.
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