Lazard's Ryan: Inflation good for dividends

The highest dividend growth is seen when there is a sharp rise in inflation and grow least when inflation is stable, says Patrick Ryan at Lazard Asset Management.

The manager of the £168m Lazard Global Equity Income fund says real annual dividend growth hits 3.5% when inflation is "sharply rising", compared with annual growth of around 0.1% when inflation is stable. He says: "When there is a sharp rise in inflation, we see the best dividend growth, which is surprising." Ryan adds: "Dividends do grow with inflation, especially in the UK, as seen over the last 80 years." He says dividends have generated nearly 30% of global equity returns since 1970, with very low risk in terms of volatility. Yet there is potential for both an inflation spi...