Invest responsibly in global dividend shares
Raiffeisen Capital Management (Raiffeisen Kapitalanlage GmbH) has switched another equity fund from its portfolio over to sustainably oriented management (as of 9 May 2022): Raiffeisen-TopDividende-Aktien is now Raiffeisen-GlobalDividend-ESG-Aktien, so a regional (European) portfolio has been transformed into a globally oriented fund. With Raiffeisen-GlobalDividend-ESG-Aktien, investors can now invest sustainably – according to ESG criteria – in companies with high dividend expectations.
Characteristics of dividend investments
Dividend shares not only offer earnings opportunities on the basis of their performance, but also distribute a portion of the company’s profits – the dividend – to the shareholders. Naturally, dividend shares are also subject to the value fluctuations on the capital markets and can result in loss of capital.
Investments in dividend shares tend to offer more consistent payouts than an investment in a broad global equity index, for example.
Companies that pay out high dividends on a sustainable basis generally have a solid business model, strong balance sheets, and continuous cash flows. Nevertheless, they cannot escape broad market developments.
Companies that have constantly rising dividends usually have commensurate “pricing power”, which allows them to push price increases through more easily. Depending on the company's business policy decisions, this can lead to above-average dividend payments. This can be beneficial particularly during periods of higher inflation and lead to lower volatility for dividend shares. It should be noted, however, that dividend shares, like any other share, are dependent on the development of the capital markets. Price or capital losses cannot be ruled out.
The Raiffeisen-GlobalDividend-ESG-Aktien fund
The investment focus of this sustainable, globally oriented equity fund is on high-dividend companies with medium to high market capitalisations (so-called mid and large caps), primarily from industrialised countries. However, investments in equities from the Emerging Markets are also possible.
For the purposes of risk-return optimisation, emphasis is placed in the management of the fund on ensuring that the sector diversification is as broad as possible.
The fund also focuses on certain sustainability themes such as responsible financing, diversity, the circular economy, and fair and transparent tax policy.
The sustainable investment objective is to achieve a Raiffeisen ESG score at the overall fund level that is significantly higher than that of the overall market. At any rate, the minimum score for the individual securities in the portfolio is 50.
What you should pay particular attention to
Although high-dividend companies generally have more stable operating figures, they too are subject to the risks that are typical of equity markets such as value fluctuations and loss of capital.
The fund exhibits elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and loss of capital cannot be ruled out.