Global stocks could offer better yields

ALP dividends franking Plato Investment Management funds management

26 March 2018
| By Hannah Wootton |
image
image
expand image

In light of the Australian Labor Party’s (ALP’s) proposed changes to franking credits, investors may want to diversify their dividend income through global stocks, according to Plato Investment Management.

Analysis by the fund manager found that some global stocks were paying higher dividends than their Australian counterparts, suggesting that more investors should look to them for income.

Over 650 overseas companies were paying yields over four per cent a year in developed markets, including less known companies such as the Norwegian ship owner and oil service investor Ocean Yield, which yielded nine per cent.

With a survey by Plato last year finding that almost a third of investors seek dividend income of more than seven per cent from their portfolios, these overseas alternatives could prove both a strong income source and a means of diversification.

This would be particularly true for pension-phase investors, who represent a fifth of Australia’s $2.5 trillion superannuation industry, who rely on income generated from their portfolios.

“Australian investors no longer have to rely on the locals, such as the big four banks and Telstra … There is no shortage of income on offer offshore, you just need to know where to look,” Plato senior portfolio manager, Daniel Pennell, said.

Local bonds, fixed income and term deposits did not offer the same income levels currently, he said.

“Rather, retirees should look further afield at other options, both here and overseas. This can be direct investments in companies that pay good, sustainable dividends or through specialist fund managers that do this,” Pennell suggested.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

1 month 3 weeks ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

2 months ago

Interesting. Would be good to know the details of the StrategyOne deal....

2 months ago

SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positiv...

2 weeks 2 days ago

Original bidder Bain Capital, which saw its first offer rejected in December, has returned with a revised bid for Insignia Financial....

1 week 2 days ago

The FAAA has secured CSLR-related documents under the FOI process, after an extended four-month wait, which show little analysis was done on how the scheme’s cost would a...

1 week ago

TOP PERFORMING FUNDS