Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Banking on another year of strong dividends
The team at Plato Investment Management is confident the year ahead is going to be a good one. Global shares are tipped to rise, following what was a strong 2021. The team recently released a report showing that dividend income was on the rise. According to the report, “North America & Japan were relatively flat, with substantial increases in European countries including Sweden (+193%), Italy (+115%) and the UK (+45%).”
The Plato Global Shares Income Fund has delivered a cool 6.1 per cent yield since the fund began. Global shares usually aren’t well known for providing high income, but Plato believes this asset class can deliver strong outcomes, especially for Australian investors looking to spread their assets across various asset classes. In total, global developed market companies paid out A$398 billion of dividends in Q4.
The fund beat its respective benchmark. The Plato Global Shares Income Fund delivered a net yield of +0.5 per cent and a total return of 2.20 per cent versus the benchmark’s +0.5 per cent income and 1.7 per cent total.
The rise came from holding underweight positions in companies, including Amazon and Tesla. The fund demonstrated positive stock selection in the US and UK, with the Health Care and IT sectors doing well, offsetting weakness in Consumer Staples and Real Estate. The fund remains actively positioned to seek superior income for low-tax investors, while maintaining full equity capital exposure and diversification to both global developed countries and sectors.
Dan Pennell, senior portfolio manager of the Plato Global Shares Income Fund, says “Consumer Discretionary names continued to lift dividends through 2021 as vaccination rates increased, household balance sheets strengthened, and economies opened up. The likes of Nike and LVMH Moet Hennessy Louis Vuitton have seen strong payouts, an indication of robust balance sheets.
“Financials have been the largest 2021 dividend-payer and as European and US banks move past mandated Federal Reserve and ECB restrictions, we see an increasingly positive outlook for dividends from the sector, with substantial recent Q4 payouts from the likes of Nordea Bank, ING Groep and Wells Fargo & Co,” says Pennell.
In summary, 2021 was the complete opposite of 2020; or as Plato describes it, an “almost perfect reversal.” Plato says, “We expect this strength will continue in 2022, as markets continue to see improved performance from the more yield-heavy sectors and economic recovery translates into even stronger dividends.”
