Maple-Brown Abbott capitalises on dividend trend
Maple-Brown Abbott has launched an Asian equity fund, investing in companies with the ability to offer sustainable and growing income.
The Asian Dividend Growth fund would provide investors with exposure to sustainable and growing income streams across Asia and aimed to deliver an attractive total return over five years while maintaining a dividend yield in excess of the MSCI All Countries Asia ex Japan index.
Companies would be assessed on their ‘ability’ and ‘intention’ to pay dividends and their ability to generate growth in dividends per share that would support a multiple expansion, it would hold between 25 to 40 companies.
The firm had been investing in Asia for almost 20 years and said the fund was a “natural extension” of the team’s experience.
Geoff Bazzan, head of Asia-Pacific equities at the business, said he had noticed a trend for Asian companies to pay out dividends which was a change from historical norms.
“The Asia region is home to more companies with a net cash balance sheet than anywhere else in the world, and there are many companies across the region with the potential to significantly increase their returns to shareholders,” he said.
“As well as having the world’s strongest balance sheets, Asian corporates have typically adopted a more conservative approach to capital management, with an average payout ratio of 35%, which is significantly below the global average.
“For the past few years we have been observing an increased focus by management teams in Asia to optimise returns to shareholders, with dividends playing a significant role. There are many companies across the region with the financial means to meaningfully improve their returns to shareholders with more pro-active capital management.
“By focusing on those companies with both the ability and intention to pay and sustain an attractive dividend profile, we believe we can offer a portfolio capable of delivering an attractive total return through the cycle with risk characteristics that are superior to that of the regional benchmark.”
AUTHOR
Laura Dew
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