Since the early 1990s, international dividend-paying companies have outperformed non-dividend-paying companies by over 6% per year.
In recent years, we’ve seen a notable difference in how U.S. and international companies are using their cash. Many U.S. companies are using it to buy back stock, while the majority of international companies are returning that cash to shareholders through dividends.
Looking ahead, we believe this distinction points to international growth and income strategies providing a larger opportunity set for investors who are in search of long-term growth and steady income.
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There is no guarantee that the issuers of stocks will declare dividends in the future, or that dividends will remain at their current levels or increase over time. Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks. Emerging and developing market investments may be especially volatile. Eurozone investments may be subject to volatility and liquidity issues. Investments in securities of growth companies may be volatile. Mid-sized company stock is typically more volatile than that of larger company stock. It may take a substantial period of time to realize a gain on an investment in a mid-sized company, if any gain is realized at all. Diversification does not guarantee profit or protect against loss.
Mutual funds are subject to market risk and volatility. Shares may gain or lose value.
These views represent the opinions of the Portfolio Managers and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.