In a previous blog on the emerging markets, we noted how small-capitalization emerging market stocks were outperforming their large-cap brethren. Interestingly, when one looks at various emerging market countries, a number of the “emerging” emerging markets—or the countries that are often considered part of frontier market indexes—have diverged from some of the more popular emerging countries.
The Japanese markets have been largely a one-way path higher in the last six months, as market participants focus on the bold actions of the Bank of Japan (BOJ) targeting 2% inflation through unprecedented monetary stimulus. One outcome of these bold policies has been a substantially weakening yen, which provides support to Japan’s exporters.
Capturing strong dividend growth is a goal for many. There are a variety of exchange-traded funds (ETFs) that track the performance of indexes focused on dividend payers and attempt to screen for the best dividend growers.
Talks of a European banking crisis have subsided. The U.S. equity markets are hitting new highs, and European bond yields from peripheral countries are starting to come down from their highs.
Companies with a long history of dividend growth may not be the key drivers of tomorrow’s dividend growth. We believe one has to be more dynamic in one’s selection criteria to capture the current shifting trend in the U.S. dividend market. Recent evidence bears this out, as we will explain below.