2021 - A dividend odyssey: Income funds eye bumper growth after $224bn hit this year

Vaccine news boosts hopes of return to market normality

Equity income fund managers are predicting a strong return to dividend payments in 2021 with encouraging reports of Covid-19 vaccine developments in recent weeks lending hope of an impending return to normality, following a $224bn hit to global payouts so far in 2020 as the impact of the pandemic forced business disruption worldwide.

Total global dividends fell by more than 14% in the third quarter of 2020 as a third of companies cancelled their payouts, according to Janus Henderson Investors' latest Global Dividend Index, which reported a fall of $55bn compared to the same period in 2019. However, this was an improvement on the 18.3% decline in payouts recorded in the second quarter, which Janus Henderson put down to "seasonal patterns" in payments that favoured "parts of the world where dividends have been more resilient". Over the course of 2020, equity income investors have rotated portfolios away from sectors...