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Investment View - ING Investment Management positive on high dividend stocks despite decline in the dividend futures market

ING Investment Management’s (ING IM) latest global economic research shows that equity earnings momentum is fading which will create an environment more suitable to growth stocks. As a result ING IM is overweight growth stocks versus value. ING IM has also maintained its overweight position in high dividend stocks as it expects dividend uncertainty to decrease following the strong expected growth in 2010 earnings, strong balance sheets and moderate pay out ratios.

ING IM says in June high dividend stocks outperformed growth stocks, while growth outperformed value.
Patrick Moonen, senior equities strategist at ING IM, says: “We have maintained our overweight in high dividend equities underscoring the increasing importance of dividends in the total return of a portfolio in a low growth, lower return environment. On top of that we forecast that dividend uncertainty will decrease following the strong expected growth in 2010 earnings. Under the assumption that pay out ratio’s will move back to the long term average, we forecast dividend increases of more than 10% making these stocks even more compelling.

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