Look abroad for income growth

Time was when investing in overseas markets meant a loss of dividend income, compared with a UK trust or fund. But not so much, it now appears.

Income-minded investors have seen overseas dividends rise 110 per cent since 2009 while payouts from UK companies have failed to keep pace, according to analysis by the £288 million Henderson International Income Trust. Manager Ben Lofthouse says payouts from companies outside the UK have more than doubled in the past nine years, with Asia leading the pack with growth of 162 per cent.

North American dividends rose 148 per cent in the period, just ahead of Japan’s 144 per cent. Emerging markets income levels shot up 91 per cent but Europe racked up the lowest level of growth at 47 per cent.

In comparison with most other regions, UK firms offered lower dividend growth at 74.5 per cent – a point worth bearing in mind for investors anxious about UK company payout levels.