Global dividends rose in first quarter

17 April 2019

Dividends across developed markets saw a rise in the first quarter of the calendar year, according to research by Plato Investment Management.

Global dividends grew by 19 per cent compared to Q1 2018, while in Australia they rose 37 per cent in the same time.

“Despite the fact we’re in a slowing economy and it’s a struggle to get income out of most asset classes, the big change in the last three or four months in the world has gone from the US interest rates and our interest rates going up, to now people are thinking the next move in Australia might be down,” Dr Don Hamson, managing director of active income fund manager Plato Investment Management, said at a media briefing yesterday.

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The strong performance came as the election approaches, with planners creating strategies to adapt to potential changes.

“Here in Australia, several companies increased dividends to beat potential tax changes to franking credit refunds, although most of the big dividend gains came from resources stocks which are benefiting from higher commodity prices,” Hamson said.

However, if Labor get in those changes may struggle to find support with independents and crossbench senators.

“I think the Greens have the same view, they support the policy, but it should be grandfathered,” Hamson said.

Grandfathering would not only have more support but also prevent issues with older retirees too late to adapt, especially women.

“If someone thought they’re okay and suddenly find they lost $10,000 a year of what they thought they were going to get you could understand why they’re upset,” Hamson said.

“If it’s going to affect us because we had a self-managed superannuation fund (SMSF), we just need to save more if we wanted to keep it, or just go into the right super fund to get franking credits.

“All the numbers show there’s more women that get earnings from franking than there are men, and women live longer than men.”

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