May 28, 2021
Lackluster yields in today’s fixed income environment are pointing advisors toward a fund that can search the globe for the best yields. Enter the
A global economic recovery should provide additional tailwinds for dividend-producing equities.
“What has very quietly happened is dividends have outperformed the S&P on an annualized basis by just as much as growth outperformed value in the prior year,” said Steve Chiavarone, portfolio manager at Federated Hermes. “This is a story that has a lot of legs.”
“An instrument that pays a regular payment, whether that’s a coupon bond or a dividend-paying stock, has a shorter duration than a growth stock or a noncoupon-paying bond, and in an environment of rising rates, you want to be shorter duration,” said Chiavarone. “This is our highest conviction call. We think dividends have a long way to run here.”