With interest rates and bond yields at historic lows, the need for attractive
dividend yield has never been greater.
Worldwide, a demographic trend has been growing — the population base is aging. And this movement
is not limited to the U.S.; the eurozone and countries such as China and Japan are facing a similar
demographic shift. For example, the aging population (60+) is expected to more than double by 2050.1
With Baby Boomers retiring and individuals living longer, we believe the need for income has never been
greater. Interest rates and bond yields remain low, forcing investors to look elsewhere for yield. Funds that
provide sustainable dividend yields may be increasingly popular with investors.
Investable Theme in Action: Ivy Global Equity Income Fund
Robert Nightingale, portfolio manager of Ivy Global Equity Income Fund, believes an aging population base is
providing fundamental support for dividend-paying equities.
A closer look at the Ivy Global Equity Income Fund
Below are 3 examples of stocks we believe provide an attractive dividend yield and capital growth opportunity in an
environment where investors are seeking income.
Johnson & Johnson (JNJ)
- A health care company that researches,
develops, manufactures and sells a wide range
of products in the health care field worldwide.
- Consumer health market leader
- Strong cash flows and
- Innovative patient care solutions
JNJ operates in three main segments: consumer,
pharmaceutical and medical devices. The
company has a number of leading brands in their
consumer products line such as Tylenol, Zyrtec
and Band-Aid. Additionally, they have a strong
R&D pipeline across their entire enterprise
focused on innovative patient care solutions.
With the increased need for health care solutions
due to an aging global population, we feel that
JNJ’s core businesses are market leaders in their
industries and positioned well for continued
free-cash flow and earnings growth.
Vinci SA (DG:FP)
- A French-based construction company
that employs more than 183,000 people in
approximately 100 countries, and is the largest
construction company in the world by revenue.
- Beneficiary of increased infrastructure
- Its two core businesses, concessions and
contracting, are complementary in terms of
their operating cycles, capital intensity and
- Increasing dividend yield
VINCI SA engages in concessions and
contracting businesses worldwide. The
company designs, finances, builds and operates
infrastructure and facilities comprising motorway,
bridge and tunnel, airport, rail, stadium, and
Due to a global recovery and a renewed focus
on infrastructure spending, we feel that VINCI’s
market share will provide the foundation for
future earnings growth and sustainable dividend
Marine Harvest ASA (MHG)
- A Norwegian seafood company that offers
farmed salmon and processed seafood to
- Farmed salmon market leader
- Operating leverage due to pricing
- Secular growth from healthy living lifestyle
MHG, a Norwegian-based fish farming company,
is the world’s largest supplier of farmed Atlantic
salmon. The farmer caters to more than 70
markets worldwide – satisfying one fifth of global
demand. The company operates in Canada,
Norway and Scotland and has seen annualized
revenue growth of 14.5% over the last five years.
The company has been a beneficiary of a secular
growth movement towards maintaining healthier
eating habits. We feel that trend will continue,
and provide the company capital growth and, as
a result, a steady dividend payout.
Past performance is not a guarantee of future results. The opinions expressed are those of the Fund’s portfolio manager and are not meant as investment advice or to predict or project the future performance
of any investment product. The opinions are current through December 31, 2017, are subject to change based on market conditions or other factors, and no forecasts can be guaranteed. The holdings discussed are
for illustrative purposes only and are not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy.
JNJ: 2.7%, DG:FP: 2.0%, MHG: 1.4% of net assets as of 12/31/2017.
Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. International investing involves additional risks including currency fluctuations, political or economic conditions
affecting the foreign country, and differences in accounting standards and foreign regulations. These risks are magnified in emerging markets. Fixed income securities are subject to interest rate risk and, as such,
the net asset value of the Fund may fall as interest rates rise. Investing in high-income securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds. Dividend-paying investments
may not experience the same price appreciation as non-dividend paying instruments. Dividend-paying companies may choose to not pay a dividend or the dividend may be less than expected. These and other risks
are more fully described in the Fund’s prospectus. Not all funds or fund classes may be offered at all broker/dealers.