Think income…think equities…think global
1 November 2019
It’s been a tough decade for savers. Historically low (at times zero) interest rates and anaemic economic growth has challenged investors looking for a decent income.
The bond market was once the staple of retirement income planning, but the falling yield from bonds has limited their appeal..
I believe investing in high-quality equities can provide a solution.
Globally, companies paid out a record US$1.37 trillion in headline dividends in 2018, up 9.3%
Over the longer term, equities have the potential to provide an attractive, sustainable and growing income, as well as an element of capital growth. Of course, there is no guarantee that investing in equity markets will deliver a positive return - and there is a risk of loss. That’s why equities are generally considered to be a long-term investment.
Since the global financial crisis in 2008, the range of assets that provide the desired combination of attractive, sustainable and growing income has narrowed. Over 60% of income from the FTSE All-Share companies is paid by just 20 - so it makes sense to have a broader approach.
A global portfolio, by contrast, enables you to access to some of the best companies in the world: the types of business that can generate growing dividends long into the future, providing savers with those much-needed returns.
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Past performance is not a guide to future performance.
Income strategy charges are deducted from capital. Because of this, the level of income may be higher but the growth potential of the capital value of the investment may be reduced. The level of income is not guaranteed.
Information correct at time of publication. This information is issued and approved by Martin Currie Investment Management Limited. The opinions contained in this article are those of the named manager. They may not necessarily represent the views of other Martin Currie managers, strategies or funds. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.