Dividends4Life: Dividend Stocks' Asian Flavor

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Dividend Stocks' Asian Flavor

Posted by D4L | Friday, December 09, 2011 | | 0 comments »

The search for yield is driving investors toward stocks that pay dividends—and some of the most generous yields are in Asia, where stock prices are among the world's cheapest. While most international dividend mutual funds are heavily allocated to North America and Europe, few have major exposure to Asia. The main reason for that is U.S. investors tend to associate Asian companies with torrid growth and believe that profits are being reinvested in their businesses at the expense of dividends, much like at U.S. technology giants Apple (AAPL) and Google (GOOG).

But that conventional wisdom is not completely accurate, some portfolio managers say. "If you look at history, Asia has been yielding over the years 75 to 100 basis points higher than the U.S. So this is nothing new," says Jesper Madsen, lead manager of the $2.3 billion Matthews Asia Dividend Fund (MAPIX) in San Francisco. "It seems like the marketplace is not fully appreciating the fact that Asia does offer the yield and that it also comes with a higher growth rate alongside."

Source: Business Week

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