A fully flexible way to invest
3 minute read
Asia. Dividends. Two words that are not used in the same sentence very often. But they should be. It has been suggested that Asia will become the global powerhouse for future dividends, and it’s certainly going that way. More companies across Asia are paying dividends than ever before. The secret is to make sure that those companies can continue to afford to pay dividends in the future. Actually, the secret is to find an investment fund to do that for you.
Who's it for? All investors
When investors look at Asia, it’s viewed as a region for capital growth, though with higher levels of volatility in comparison to other markets around the world. However, over the last decade, there has been a shift which has resulted in more and more companies paying out profits as dividends. The developing dividend story in Asia could well mean it’s a region worth considering for those investors seeking an income.
There are plenty of companies across Asia that are generating strong revenues and sustainable profits. Historically, these businesses have reinvested that cash back into the company in order to generate further growth in the future. But more and more companies are paying out these cashflows as dividends to shareholders. This is in part due to the ageing populations in Asia who are looking for investments that pay an income.
When it comes to investing in companies that pay out dividends, it’s important to do your homework. The most important factor to evaluate is whether companies can afford to pay their dividends, and afford to increase their dividends over time. This is part of the work carried out by the team who manage the Janus Henderson Asian Dividend Income Fund.
While there are a healthy number of funds that invest in Asian equities, only a few focus on delivering a high income yield. The investment team at Janus Henderson believes Asia offers attractive income opportunities based on an abundance of companies that are generating lots of cash, which they are paying out as dividends rather than reinvesting it back into the business.
But it’s not all about income. The fund is also looking to invest in companies that have potential for share price growth as well. The team at Janus Henderson sticks to a tried-and-tested investment process which includes more than 1,000 company meetings every year as they try to identify the companies most likely to produce strong cash flows and good dividend yields.
Asia is an exciting place to be if you have a long-term investment horizon. Janus Henderson has an experienced and talented Asian fund management team, and while no one knows where markets are heading from here, this could be a fund worth considering if you are thinking of investing in Asia and find the dividend approach interesting. There are also three more funds on the Barclays Funds List which focus on Asia, including the Fidelity Asia Fund and the Stewart Investors Asia Pacific Leaders Sustainability Fund.
If you prefer to take an even more ‘general’ exposure to emerging markets, you may also wish to look at funds that invest across the entire global emerging markets space. There are two such funds on the Barclays Funds List. Find out more information on these funds.
Correct at the time of publishing.
To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.
Past performance of the fund and its manager are not a reliable indicator of their future performance.
We don’t offer personal investment advice so if you’re unsure you should seek that independently.
Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.
These are our current opinions but the future, as ever, is uncertain and outcomes may differ.
Read the Assessment of Value report [PDF, 3.2MB] for funds run by Barclays.
The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.
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