WHY DO DIVIDENDS MATTER?
Provide a Strong Foundation for Total Return
Potential Hedge Against Volatility and Market Declines
Provide a Strong Foundation for Total Return
Of course, dividends provide an income stream for investors, but many don’t realize that dividends have historically accounted for a significant portion of equities’ total return over the longer-term as well. In fact:
For this reason, we believe even non-income seeking investors should consider a dividend strategy to potentially meet their investment goals.
84
%
Nearly 84% of the total return of
US equities (S&P 500®) came from the reinvestment of dividends and the effect of compounding over nearly 60 years (12/30/1960-3/31/2021) .
1
50
%
International developed market equities (S&P Developed BMI Ex-U.S. & Korea LargeMidCap Index) garnered approximately 50% of their return from dividends over the last decade-plus (2/13/2009-3/31/2021).
1
47
%
Emerging market equities (S&P Emerging Plus LargeMidCap Index) garnered approximately 47% of their total return from dividends and the power of compounding over the last 15 years (12/31/2003-3/31/2021).
1
Potential Hedge Against Volatility and Market Declines
Numerous studies have demonstrated that dividend-paying companies have historically exhibited less relative downside risk and take less time to regain losses, therefore delivering higher risk-adjusted returns over the long-term investment horizon.
2,3
