“Some of those are cyclical companies and many of them are financials, including the Chinese banks which are probably yielding north of 7%.”
However, Bazzan said financials weren’t a “sleep-at-night” dividend play because when crisis came, the first thing that would get cut was dividends, but Asia still provided strong opportunity.
“If you look at Asia holistically, its unique from the opportunities you get from that perspective,” Bazzan said.
“There were historically lower pay-out ratios, there’s a bunch of reasons for that, but there is clear evidence hat’s changing and there is rising free cashflow.
“Strong dividends, strong balance sheets, rising free cashflow – so that money has to go somewhere and you’ve seen increasingly companies across the region be more generous in distributing those profits.”
Super funds in rapid transition to ESG
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Boutique bets on value turnaround for 2021
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28 January 2021
Value stocks saw a strong Q4 in 2020 and that trend should continue into 2021, after what has been a weak decade for value stocks compared to growth, according to boutique fund managers Maple-Brown Abbott (MBA).
Dougal Maple-Brown, MBA head of Australian equities, said the number one question which clients and consultants had asked them over the last couple of weeks was whether this was it for value or was it part of a sustained turn as part of a market rotation.
“Not surprisingly, we think it’s the latter – after a strong quarter, the [ASX 300] index was up about 14% and most of our funds did 4-5% better than that,” Maple-Brown said.