Dividend growth is likely to remain muted

Dividend payers are likely to command a premium in 2010 as dividends and dividend growth are likely to remain muted given continued low payouts from key areas of the market.

Therefore portfolio construction will be critical and should encompass a broad mix of stocks across sectors, market capitalisations and investment opportunities. A focus on dividend quality and sustainability naturally leads towards an allocation to stocks often perceived as ‘boring’. However these companies often have high barriers to entry, generate high returns and stable cashflows. These types of companies tend to consistently pay out distributions to investors and naturally lead to fund allocations towards pharmaceutical, telecommunications, utilities and food retailers. Howev...