Increasing Yield

Boosting yield and income can help cushion portfolios, effectively reducing downside risk when disruptions occur in both domestic and global markets.

Dividend Payers Offer a Good Cushion for Portfolios

 

 

Index Returns with Dividends vs. Returns without Dividends

Source: Morningstar Research Inc. as at January 31, 2018. Returns are based in local currencies.

Seeking income-producing securities has been proven to benefit portfolio returns over time.

Just looking at companies with a 3% yield or greater, we see much greater selection available outside of North America.

Source: RBC Capital Markets Quantitative Research as of December 31, 2017, Non-dividend payers, dividend cutters, dividend payers and dividend growers are cross sections of the S&P/TSX Composite Index based on companies identified by corporate mandate as it relates to paying dividends.

*Source: Morningstar Research Inc. Securities identified from the constituents of the MSCI All World Index, as of May 31, 2016. Total number of constituents as of May 31, 2016 was 2,475.

 

Yield Remains Scarce…

Government bond yields worldwide have been in steady decline for the past decade with a slight upward trend only unfolding now. But it will be sometime before they reach pre-2008 highs.

Source: Bloomberg from January 31, 2005 to January 31, 2018. Developed countries selected based on their relative economic size in relation to other developed nations.

 

But Opportunities for Greater Yields do Exist

Source: Bloomberg as of January 31, 2018. Developed countries selected based on their relative economic size in relation to other developed nations.

Source: Morningstar, as of December 31, 2016, in Canadian dollars. For illustrative purposes. You cannot invest directly in an index