Investing in Asia for Dividend Income
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Charles Rotblut (CR): In your Asian funds, what guides your allocation decisions?
Jesper Madsen (JS): For the Asia Dividend Fund, it is really a matter of saying, “What is the bottom-up telling us, in terms of the availability within the universe?”
Maybe I can take a step back and lay out the broad universe for you, because it also helps explain how we construct a portfolio. In Asia, the dividend yield for the Asia Pacific region is sitting around 3%. That’s inclusive of Japan and using the MSCI All Country Asia Pacific Index as a proxy for the general market. If you turn around and look at the U.S., there you would see a dividend yield of about 2%. These are the 2011 consensus estimates for both those numbers.
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Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.