Asian Income Trust - The rise of Asian dividends
When discussing Asian equity markets, analysts make a great deal of the long-term potential that it represents for investors given the trend of growing economic strength in the region. While those arguments are valid, in one sense in particular Asian markets are not just an asset class for the future, but for today too: equity income.
Strong cash flow and new listings, amongst other factors, have helped drive dividend payments from Asian companies in recent years. The region is now a serious contender to the more traditional equity income markets in Europe and the UK. The dividends are not just restricted to a small part of the Asian market either: just like in the UK, around a third of listed companies in Asia yield over 4%*.
The investable universe is also large, with more companies in Asia yielding over 4% than in the UK and continental Europe combined*, so investment managers have a wide array of stocks from which to build their portfolios.
One of our favourite income stocks in Asia is Thai Beverage. Listed in Singapore, the company is a dominant force in the Thai market, producing a highly profitable range of beers and spirits. Its stock has a good yield and, since we believed it was attractively valued versus its international peers, we added to our holding in December and January.
Legal & General Investment Management - February 2012
* Source: LGIM, FTSE All-World Indices, as at 31 January 2012
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The views expressed within this document are those of Legal & General Investment Management, who may or may not have acted upon them. Legal & General Investment Management is authorised and regulated by the Financial Services Authority and is the Investment Adviser to the Legal & General Asian Income Trust, a UK authorised unit trust. Issued by Legal & General (Unit Trust Managers) Limited.
This document should not be taken as an invitation to deal in Legal & General investments or any of the stated investments. Remember, the value of investments and any income taken may fall as well as rise, are not guaranteed and you may not get back the full amount of your original investment. Past performance is not a guide to future performance. Exchange rate changes may cause the value of any overseas investments to rise or fall. Details of the specific and general risks associated with the funds mentioned are contained within the Key Information including the Simplified Prospectus.