Why invest in income funds?
Companies with stable or growing dividends may tend to deliver better long-term risk-adjusted returns compared to those that do not pay dividends or have interrupted dividend policies.
Source: Ned Davis Research and Hartford Funds. Note: Returns data from 1973-2024.
Banks, utilities, and consumer staples often increase dividends in line with earnings growth, which historically tracks nominal GDP and inflation. For example, Malaysian banks have stable payout ratios and benefit from economic growth, supporting dividend sustainability.
Malaysia’s headline inflation is low. 1.2% as of July 2025 while FTSE Bursa Malaysia KLCI index dividend yield is 4.24%. This creates a positive real yield (income return after inflation), which preserves and grows purchasing power.
Source: Bloomberg as of 8 September 2025
*Distributions are not guaranteed and may fluctuate. Past distributions are not necessarily indicative of future trends, which may be lower. Distribution payouts can be made out of (a) income; or (b) net capital gains or a combination of any of (a) and/or (b).
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