He said: “The outlook is still good, but we are forecasting dividend growth to be a little slower in 2016: it is hard to see the resources sector increasingly its dividends and there are probably still some cuts to come. Nevertheless, the financial sector is still normalising its dividend payouts, while sectors such as pharmaceuticals and consumer goods are still seeing good growth, while generating lots of cash.”
Responding to the recent latest Henderson Global Dividend Index, Lofthouse said that underlying dividend growth of 9% was driven by the US, though Japan and parts of Europe were also strong. China and the resources sector were the notable weak spot.
The Henderson International Income Trust has over 40% of its assets in the US, and it represents the biggest country weighting. The trust invests in a number of Reits, plus a number of the financial companies such as JP Morgan. He added: These are very high quality companies, and there is lots of opportunity there.”
He added that many US companies are buying back stock, which is enhancing earnings: “This is not necessarily a view on the economy, but these companies are generating a lot of cash, while at the same time, the need for capital investment is lower.”
The NAV for the Henderson International Income Trust is up 36.2% over three years, compared to the AIC Global Equity Income sector average of 33.1%.