Global yields at their lowest level since 1790
The bull market in global bonds has seen the yield on US 10-year Treasuries decline from 15% in 1981 to as low as 1.4% in late July. As interest rates and yields have declined to the lowest on record, investors reliant on fixed income to meet their retirement or other needs have suffered.
With global economic growth remaining fairly tepid and with significant structural issues likely to continue to undermine growth, we expect yields to remain low for some time.
Whilst dividend investing makes sense to us in its own right, given the centrality to a value based investment strategy, we feel that now more than ever, dividend income from high quality equity has a role in portfolio construction.