As Australian banks and others begin to cut their dividends in the wake of the COVID-19 pandemic and the economic downturn, Australian investors seeking income can still generate dividend income and benefit from investment opportunities residing offshore, according to Epoch Investment Partners.
Damien McIntyre, CEO with GSFM – the distributor of Epoch’s retail funds in Australia – says record low interest rates were already impacting Australian investors in their search for income before COVID-19.
“Australian investors are already well versed in receiving dividends for income, but they are typically overweight domestic equities. Many local investors – perhaps focused too much on the benefits of franked dividends – are unaware of the diversification benefit and potential of comparable dividend income gained by investing globally. But in uncertain times such as these, the diversification benefit of global equities becomes much clearer.
“In a world starved for yield a portfolio of high quality global equities is a good place to go for income when the bond yields alone are not up for the job.
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