The EM dividend safety nets

EMERGING MARKET DIVIDENDS

Klaus Bockstaller, head of global emerging equity funds at Pictet Assset Management, says it is always difficult to pinpoint exactly when emerging market performance will turn. But timing should be less of a concern when you have a safety net in the form of a high dividend company.

Emerging market stocks paying high dividends offer an attractive way for yield-seeking investors to rebuild their exposure to the developing world, following the underperformance of emerging market assets over the past three years. But there is more to dividend paying companies than just yield. Often, they tend to be better managed firms, which can be found in both cyclical and defensive industries. In addition, their stocks tend to be less volatile than non-dividend paying counterparts. Given that central banks are likely to maintain interest rates at exceptionally low levels for som...