Should investors look to GEMs for dividend growth?

ON ASIA

There was a time when hardly any emerging market companies had a dividends culture. But over the years that has changed dramatically, as corporate governance improved and companies in Asia and other parts of the emerging market world started to focus more on minority shareholders.

In 1998, only about 40% of emerging market companies paid dividends. Today, that number is about 88%, which is higher than in the US.  Over the past three years, emerging markets underperformed global equities despite stronger economic growth. This has been driven mainly by weakening exports and slowing investment as the global economy continued to be affected by a prolonged slowdown, presenting a challenging trading environment for many companies. Being able to manage volatility in these equity markets can be extremely valuable for investors. Companies which pay above average dividen...