According to the latest edition of the firm’s Global Dividend Index, it said the $29.1bn fall in dividends was the third consecutive quarterly decline largely as a result of the strength of the US dollar.
“At negative $52.2bn, the exchange rate effect this quarter was the largest in any period on HGDI record,” Henderson said. It added, if one strips out exchange rates, timing, index effects as well as the change in special dividends, underlying dividend growth was 8.9%.
This increase in underlying growth, Henderson said, continues to be driven by growth in dividends from US stocks, which were up 10%, to $98.6bn, the sixth consecutive quarter of double digit growth.
“The US remains the undisputed engine of global dividend growth but there are appositive developments in many parts of the world. The UK looks more encouraging after an expected subdued start to the year, but Europe and japan in particular are doing increasingly well, the former boosted by recovery among financials and better economic news. As the economy in Europe continues to strengthen, so dividend growth is likely to accelerate too,” the firm said.
Dividends in the technology sector also came to the party, rising the most in the quarter, up 15.9%, but it was the growthin the financials sector that provides most pause for thought.
Accounting for around a quarter of annual global dividends, Henderson pointed out that increasing dividend payments in this sector bode well for income investors.
Over the quarter financials dividends rose 0.3% at a headline level, despite the negative currency impact.
The underlying strength in the second quarter, prompted Henderson to upgrade its outlook for underlying growth to 7.8% from 7.5%.
“We now expect global dividends of $1.16 trillion this year ($1.12 trillion previously), which is down just 1.2% at a headline level.
