Henderson Global Dividend Index - February 2017

Edition 13

  • Global dividends edged ahead 0.1% on a headline basis in 2016, reaching $1.154 trillion, while underlying growth was 0.6%
  • A slowdown in the US, sharp falls in Australia, the UK and emerging markets, plus lower special dividends and a stronger dollar explain the lack of growth
  • US growth slowed progressively during 2016, following double-digit increases in 2014 and 2015

What is the Henderson Global Dividend Index?

The Henderson Global Dividend Index (HGDI) is a long-term study into global dividend trends, and is the first of its kind. It is a measure of progress that global firms are making in paying their investors an income on their capital. It analyses dividends paid every quarter by the 1,200 largest firms by market capitalisation.

Global dividend growth disappoints in 2016, while dollar strength clouds outlook for 2017

Global dividends inched ahead just 0.1% in 2016, according to the Henderson Global Dividend Index, reaching $1.154 trillion. There were four reasons for the lack of progress. First, dividend growth in the US, which accounts for two fifths of the global total payout, slowed sharply. Secondly, the UK, Australia, and emerging markets saw declines year-on-year. Thirdly, the US dollar was stronger, so dividends paid around the world were translated into dollars at less favourable exchange rates. And finally, special dividends were lower year-on-year. On an underlying basis, which adjusts for changes in exchange rates, special dividends and other factors, growth of 0.6% year-on-year was also very modest. Following a weak fourth quarter, when dividends fell 0.4% year-on-year, the HGDI ended 2016 at 158.2, with little change to global dividend growth at the headline level in recent years.

 

Key Highlights

  • Global dividends edged ahead 0.1% on a headline basis in 2016, reaching $1.154 trillion, while underlying growth was 0.6%
  • A slowdown in the US, sharp falls in Australia, the UK and emerging markets, plus lower special dividends and a stronger dollar explain the lack of growth
  • US growth slowed progressively during 2016, following double-digit increases in 2014 and 2015
  • In Europe, there was solid growth, while the UK, Australia and emerging markets lagged behind
  • Global economic growth outlook is improving, which is good news for dividends
  • Henderson expects 3.2% underlying growth, though a strong dollar (assuming current exchange rates are maintained) means headline growth will be just 0.3% taking dividends to $1.158 trillion.

All figures as at 31.12.2016, Henderson Global Investors

Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

This information does not qualify as an investment recommendation.


Glossary of terms

Headline dividends – The sum total of all dividends received.
Headline Growth – Change in total gross dividends.
Special dividends – Typically, one-off payouts made by companies to shareholders that are declared to be separate from their regular dividend cycle.
Underlying dividend growth – Headline dividend growth adjusted for special dividends, change in currency, timing effects and index changes.

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