Why EM companies will continue to pay consistent dividends

Projit Chatterjee, manager of the UBS Emerging Markets Equity Income fund, talks to Joanna Faith about how he has positioned his portfolio since launch last year and his outlook for key emerging market regions.

What are the main advantages of an income strategy when investing within emerging markets? Emerging market companies pay stable dividends and exhibit a consistent dividend discipline. Over the past ten years the payout ratio for emerging market companies has typically ranged between 35%-45%, on average this is 10% less than the levels of payout made by developed market companies. There is potential for these levels to grow further. Meanwhile, emerging market companies are capable of paying a sustainable income stream, while offering the potential for capital appreciation. Emerging ma...