What the US fiscal cliff deal means for global income investors

We believe 2013 is shaping up positively for global equity income investors after the New Year's Day Tax Agreement by US politicians which partly resolved the fiscal cliff.

In November, US-listed dividend paying companies such as electricity utility Southern Company and telecommunications giant AT&T were heavily sold off as investors grew concerned that dividends would be a target for politicians looking to reduce the US fiscal deficit. A failure to resolve the fiscal cliff would have seen the current dividend tax rate of 15% rise to 43% for the highest income earners. Although most thought this would be avoided, many commentators had suggested a rise to 25% was a realistic possibility. A host of US companies accelerated their dividend payments in 2012 t...