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Aberdeen Australia Equity Fund Message Board

  • wright.tom64 wright.tom64 Dec 26, 2011 11:55 AM Flag

    Estimate a drop in March dividend

    29 cents in December but I suspect it will drop to about 25 cents in March and 22 cents in June quarter unless the Aussie shares have a good recovery. The fund is giving up capital gains in return for delivering a higher dividend and I am no longer sure I think that is a great idea although shares in the EWA fund have fallen about the same from its highs in percentage terms and they only pay about 4.5%.

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    • Why do you expect a 25% drop in the divi, the yield maybe as pps, I suspect, will rise somewhat in the next 6 mos. along with most markets. The Assie $ should ease some lowering interest rates there but I don't this it will be that severe.

      Can you elaborate on how you got your figures? Maybe I am missing something.

      • 1 Reply to whymechi
      • Good point and I do hope the Aussie stock market recovers in the next six months but currently it is in the dumps threatening to break below 4000 and IAF has followed it down. Managers of the fund have been trying to maintain about a 9-10% distribution but about half of that has come out of paid in capital and not earnings and at 9 dollars a share, a 10% yield is going to be about 22-23 cents per share although they base their distribution on previous average closing prices. So, I am estimating about an average of 9.50 for the next three months and 9.00 up to June UNLESS, a I hope this is true, the Aussie market recovers strongly. China and to a lesser extent India, both of which are struggling with corruption and slowing growth affect how well many Aussie companies do. Nonetheless, I consider this a buy for the distribution but am not overwhelmed by growth prospects.

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