Dividend yield and dividend growth represent the majority of total equity return over the long-run. For an investor having at least a 5-year time horizon, more than 70% of the total return comes from dividend yield and dividend growth.

## Dividend yield and growth represent majority of total equity return 

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## Positive environment for dividend investing 

Dividend Investing has attracted in the last years a growing number of investors with a defensive profile looking for yield, low volatility and a protection to the downside.
This positive environment is set to last. Many companies have regained financial soundness and have large cash reserves. To hand back a part of this cash to their shareholders via dividends has become a hot topic.

The amount of dividend paid across the world by listed companies reached a record high in 2013 with more than a trillion US dollar being paid out. This represents a 40% increase compared to the amount paid in 2009.

The increase can be explained by three mega trends, i.e. the increase of dividends paid out by emerging companies, by financial institutions that gradually recover from the crisis and by IT firms that face growing pressure from their shareholders to hand back part of their cash.

## Further outperformance expected 

After under performing between 2008 and 2012, Value and High Dividend strategies outperformed the global market in 2013. The MSCI Europe High Dividend index posted a 22.8% total return in 2013 and MSCI Value posted a 22.5% total return, outperforming the broad market index by 224 and 196 basis points respectively.

In the first two months of 2014, European High Dividend and Value indices have rallied further, outperforming the broad benchmark again. This outperformance may extend to the remainder of 2014 and in 2015 on the account of an economic recovery with rising earnings and dividends, rising bond yields in combination with the secular preference of an ageing population for yield.