Yield Hunters Stuck On UK Despite More Income To Be Found Overseas

The findings revealed 58% of UK retail investment, excluding income funds, goes into international equity holdings. However, when looking purely at income funds, only 20% of money goes towards those with an international remit.

This comes despite over 90% of global dividends being paid by companies outside of UK. Furthermore, between 2009 and October 2018, dividends outside the UK have risen by 119%.

Global dividends reach fresh high in 'exceptionally volatile' markets

According to the research, North America has seen dividend payouts rise by 153% since 2009, while those in Japan have increased by 158%. The rest of Asia however has seen the fastest dividend growth of 164%, while emerging markets also showed a rise of 108%.

Meanwhile, the top 1,200 global companies collectively paid £889bn in dividends during the year to October 2018, but only 50 of these were UK companies. After taking them out of the analysis, the remaining 1,150 companies paid out a total of £816bn.

When focusing on only UK companies, concentration risk can also be present as investors must rely on a select number of businesses to deliver the majority of their income.

The latest statistics from the Janus Henderson Global Dividend Index found that only five companies in the UK account for 40% of the total dividends paid in the UK.

Outside of the UK however, the top 82 dividend payers account for 40% of the total.

AJ Bell warns investors over 'questionably high' FTSE 100 dividend yields

Ben Lofthouse, manager of the £275m Henderson International Income Trust, which invests in companies outside of the UK with attractive yields, said: "In the last few years, a culture of dividend-paying is being more and more entrenched both in other big economies like Japan, and among sectors like technology that have traditionally not paid much in dividends - Samsung, for example was one of the world's top twenty dividend payers last year. Four years ago, it wasn't even in the top 100.

"There are a number of benefits to including international dividends as part of an income investor's portfolio, including access to different industry sectors and diversification of regulatory and political risks."

Over three years to 25 January, the Henderson International Income Trust has returned 50%, slightly behind its MSCI AC World ex UK benchmark return of 54% and marginally ahead of its AIC Global Equity Income sector average return of 47%, according to FE. It is currently trading on a premium of 2.1%.