Schroders' Laud warns on global yield crisis

Schroders' Sonja Laud has warned investors are facing a global yield crisis, and she expects cash to flow out of government bonds and into equities in the hunt for dividends.

The equity income manager said the US market has become a crowded trade for income seekers, as the S&P 500 hit an 80-year payout ratio low of 27% in 2011, forcing investors to look for dividends in an ever-shrinking pool. High yielding companies paying dividends of 4% or more comprise only a very small percentage of the market, Laud said.  “There is a global yield crisis. We are seeing a mismatch in the US with payouts at an 80-year low and treasuries yielding 1.8%. If Microsoft offered a 5% yield, there would be a huge rush to it from treasuries. I am not expecting this to happen ove...