Dividend growth since inception
Pence per share |
8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 |
1.40 |
4.00 4.05 |
4.25 |
4.50 |
4.65 |
4.90 |
5.30 |
5.70 |
6.00 |
6.30 |
7.25 |
0.00 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
Source : Henderson International Income Trust , Annual Report 2022
Dividends : a buffer against market volatility Why is the investment power of dividends often overlooked , despite the fact they have played a major role in equity portfolio returns for decades ? It is partly because dividends can be the tortoise rather than the hare when it comes to investment returns . Equity markets can be volatile , and many investors spend a lot of time focusing on timing investments to catch periods when markets rally . Looking back through history though , dividends have accounted for 40 % of stock market returns since 1930 and 54 % during decades when inflation has been high – an important point given the current economic climate . Being invested through cycles can be rewarding , and not being invested means you miss out on the dividend returns . Ben Lofthouse , Portfolio Manager of Henderson International Income Trust ( HINT ), believes that investing in companies with consistent and growing dividends can help investors navigate the current environment . There are two key reasons for his view .
Issue 91 - January 2023 / 33 /