Lee King Fuei manages the Schroders’ Asian Equity Yield fund and focuses on dividend investing. Here are some of his insights gain from researching on dividend investing in the latest issue of The Edge:
- When he realize that his cash rich companies paying out good dividends are underperforming, he carried out a research to see whether there is a paradigm shift so that Asian dividend investing doesn’t work any more. What he found out is that this strategy that focus on good quality companies doesn’t work that well during bubble built up. This may give a good indication towards a market top in the future.
- Further example during the Asian Financial Crisis in late 1990s, high-dividend stocks underperformed in the months preceded.
- This was the case before the dot com bust in 2000 as well.
- In the aftermath of a crisis, high-dividend stocks tend to outperform for several years to …