Individual investors know that dividends are paid to common shareholders by corporations across the world, in different economies, different markets, and variety of industry segments. It is also a common knowledge that the characteristics of such dividends such as yield, frequency, how dividends are perceived, quality, and growth are very different. In addition, as a US-based investor, there are additional risk factors, some of which I had discussed earlier.
I am of the view that a look at individual index and their yield should provide general birds’ eye view of trends in any given market. While there may be varied arguments about quality and validity of such comparison, I still believe it is a good start to understand any given market and its policies vis-à-vis common shareholder dividends.
I compared three markets viz. US markets (using SPY), Europe (using IEV), India (S&P CNX NIFTY). I would have liked to compare Brazil and China, but could not identify a low cost ETF or fund that represented at least 60%+ of the local market.
I looked at dividends from year 2000 onwards because (1) Emerging markets like India started showing significant addition to global economy; and (2) since year 2000 US markets are considered to be facing challenges. I wanted to compare this period because differences get magnified during challenging economic times. The Chart 1 shows the dividend yield for all three indexes (as represented by corresponding ETFs) and Chart 2 shows the dividend growth year-over-year.
This does not include the focused dividend funds which may provide higher yield and a different growth trends. However, it does provide a birds eye view based on local indexes. The summary is, the US and European markets show consistency in dividends relative to Indian market. Overall all markets reduced dividends in 2009.
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Monthly Income Updates – August and September 2024
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Dear Readers, I am back with yet another monthly income update post.
Devoting time to blogging has been a challenge with work and time with
family taking p...
1 day ago