Analyzing The Global Dividend Stream

Each year, we monitor the global Dividend Stream® for growth so we can refresh the weights of the underlying constituent companies in various WisdomTree Indexes.

This year, the global Dividend Stream of the WisdomTree Global Dividend Index has reached a new high, and regionally only the developed international market is below its previous respective high. Recently, the developed international and emerging markets were exhibiting lower growth than the U.S., but this year saw double-digit gains for both regional markets outside the U.S., with only a modest increase for the U.S. The global Dividend Stream is measured in U.S. dollars, so foreign currency strength over the past year helped slightly with growth rates. The global Dividend Stream was able to grow at 8.77% over the most recent one-year period in U.S. dollar terms and 7.85% in local currency terms.

To calculate the global Dividend Stream, we start with the 5,890 investable dividend payers in the WisdomTree Global Dividend Index. We then take the dividends per share for each company and multiply them by their shares outstanding. The table below aggregates the Dividend Stream of each company by its respective region and shows a percentage breakdown by region.

Dividend Stream

 Dividend Stream Adjustment in Emerging Markets

Every year ahead of the annual rebalance, we conduct a thorough review of our current index methodologies and determine if any adjustments or enhancements need to be made. Historically, outside of India, we have weighted each constituent by its full dividend market cap, meaning there is no adjustment for privately held or non-publicly traded shares (i.e., float). Over the past few years, we have been monitoring the impact on emerging markets and decided this year to apply the investability weighting factor across the Dividend Stream of all emerging market companies, instead of penalizing just India.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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