2023 Global Dividend Rebalance

WisdomTree conducts an annual rebalance of its Global Dividend Index each October. 

At this year’s reconstitution there were 5,410 selected companies (including large, mid and small caps) from the U.S., 21 eligible developed market countries and 18 eligible emerging markets countries.

Constituents are weighted based on their contribution to the total Dividend Stream®. The largest dividend payer as of the screening date was Microsoft, with a $22 billion dividend. 

A few notable year-over-year changes:

• Taiwan Semiconductor—Much like the U.S. tech giants Microsoft and Apple, Taiwan Semiconductor has been a consistent dividend grower over the last several years. In May, it declared an increase of its quarterly dividend from 2.75 to 3 Taiwan new dollars, contributing a nearly $2 billion increase to the Dividend Stream of the WisdomTree Global Dividend Index.

• HSBC—The largest increase to the Dividend Stream came from HSBC as the bank re-initiated its regular quarterly dividend for the first time since the pandemic.

• BHP Group—As with many Materials and Energy companies, BHP reduced its dividend by roughly 50% due to a profit decline coinciding with sliding commodity prices.

Top 20 Global Dividend Payers

Though not included on the previous list of largest global payers, Japanese equities have gained a lot of attention this year. Stock prices have soared for a variety of reasons: the fall in the yen benefitting the export-dependent economy, Warren Buffett declaring his continued confidence in his Japanese trading house investments and the major Japanese stock exchange announcing guidelines aimed at improving shareholder value.

For investors looking for tangible evidence of Japan’s corporate governance reforms, look to the dividend growth of Japanese equities. Since the end of 2019, Japan dividends have grown by more than any other market—and almost twice as much as the U.S.

Dividend Growth by Region since December 2019

The Global Dividend Stream

In aggregate, global equities have a Dividend Stream of $1.5 trillion. The U.S. provides 44% of dividends, far less than its 61% share of the global market cap.

If we look at Dividend Stream-weighted versions of U.S. equities, we see a yield of 3.5%—twice as high as the 1.6% yield on the market cap-weighted index.

For global equities, the market cap-weighted yield is 2.1% relative to a 4.5% Dividend Stream-weighted yield.

Global Dividend Stream Summary

WisdomTree Global Dividend Index

The WisdomTree Global Dividend Index underwent its annual reconstitution at the close on October 18.

The fundamentals-based rebalancing process generally results in giving greater weight in companies increasing their payouts and decreasing weight in companies that have lowered payouts. 

From a sector perspective, the biggest change was a decrease of over 3% in weight in the Materials sector. After a commodities boom in 2021 and 2022 that led to increased dividends, many large Materials companies cut dividends in 2023 (as we saw with BHP) alongside a drop in profits and cash flows.

WisdomTree Global Dividend Index Sector Weights

From a country perspective, there were similarly modest changes. The U.S. remains the largest weight, at 42%, ahead of the 8% exposure to Japan. Those weights compare to a 61% weight for the U.S. and 6% weight for Japan in the market cap-weighted MSCI ACWI Index.

WisdomTree Global Dividend Index Country Weights

WisdomTree Global High Dividend Index

The WisdomTree Global High Dividend Index is a subset of the WisdomTree Global Dividend Index by selecting the highest 30% of companies by dividend yield from each region: the U.S., the developed and emerging markets.

A regional adjustment factor is applied so that regional weights are equal to the float-adjusted market capitalization weight of the universe of dividend and non-dividend payers of the U.S., developed and emerging markets.

Top 10 Holdings

For investors looking for a globally diversified income portfolio with a 4%–5% dividend yield, we believe the WisdomTree Global High Dividend Index would be a perfect place to look.

The WisdomTree Global High Dividend Fund (DEW) seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Global High Dividend Index.

Index Dividend Yield