Asia rides to rescue of dividends

Investors are increasingly looking East as dividend culture of UK companies wanes, capping what was dubbed a ‘dismal decade' for UK shares.

As the dividend culture shared by UK companies and cherished by their investors wanes, investors are increasingly looking to Asia as an alternative. Even UK equity income managers are, to an extent, looking East, as domestic banks reduced or eliminated dividends last year. Two that remained widely in favour - HSBC and Standard Chartered - did so chiefly for their Asian exposure. Every other region globally lags Asia ex Japan's 3.4% yield. UK companies yield 3.4%, Europe's yield 2.6%, with North America (1.7%) and Japan (1.1%) further back (see chart 1). Last year was a disaster ...