The results of the poll conducted during Invesco’s sixth annual Dubai Investment meeting, which was attended by 329 intermediaries, reveal that more than two fifths (38%) of the respondents feel positively or very positively about growth prospects for 2012. Furthermore, one in five (19%) are generally being instructed by their clients to buy in these volatile market conditions.
“The fact that such a sizeable number of intermediaries are confident on growth prospects suggests there is optimism in the region for the year ahead. It is also encouraging that clients are requesting their brokers to buy rather than sell, suggesting they believe there is value in markets today and they are embracing the current environment as a buying opportunity,” Nick Tolchard, Head of Invesco Middle East, said.
The findings also reveal some interesting trends in investment strategy, specifically equity income. According to the intermediary poll, nine out of ten (92%) utilise an equity income strategy, demonstrating how it is integral to many Middle East investors’ portfolios. Two fifths (37%) use it for diversification purposes and 35% as part of a total return strategy, while one in five (20%) specifically use it to generate income.
In addition, almost half (43%) of the respondents view dividends to be the primary driver of total returns over the long term, in terms of dividend yield (for 29% of the intermediaries) and dividend growth (for 14% of the intermediaries).
“Dividends are an important part of total return. Income investing is about building portfolios which exhibit above market yield and underlying dividend growth, whilst taking advantage of the opportunities that exist in a low interest world. In these uncertain times, it can make sense to invest in companies that pay dividends,” Nick Mustoe, Chief Investment Officer at Invesco Perpetual, said.
“We believe there are attractive opportunities to be found through equity income investing, and by taking a global view, the potential diversification benefits are greater.”
The Invesco Global Equity Income Fund is managed by Paul Boyne and Doug McGraw. It aims to generate a rising level of income, together with long-term capital growth, by investing primarily in global equities. In pursuing this objective, the fund managers are able to include the investments they consider appropriate.