Cullen dividend fund offers investors safe haven

The Cullen North American High Dividend Value Equity, a Dublin-domiciled Ucits fund, has demonstrated the value of dividend funds with a strong outperformance.

The fund is up 9.38% year-to-date, which compares favourably against the benchmark, 1.30%, and the peer group, -0.35%, the fund manager said in a note. Since the funds inception (October 2010), it has risen 12.00%, versus a 10.30% gain in the benchmark and a 9.72% rise in the peer group.

Interest in the fund is driven by investors looking for a safe haven for their assets, says James Cullen, founder of the Cullen Capital Management. “There is not much interest in equities, when you get 50 basis points on two-year Treasuries. Investors are spooked by the markets, and are looking for a safe heaven.”

In just over a year, Cullen’s offshore Ucits fund has seen inflows of $70m, almost all from the UK. Cullen said he is expecting inflows to be boosted by large institutional investors and brokers, which have been waiting for the fund to establish a track record.

The Cullen North American High Dividend Value Equity Fund mirrors other Cullen investment products with proven track records in the US, consistently outperforming the S&P 500 index, with significantly lower volatility, says Cullen. Since inception in 1994, Cullen’s composite performance for its North American high dividend value strategy has been +355.7% compared to a gain of +276.9% in the S&P 500.

Cullen said: “The performance of this fund reflects the power of dividend investing, and the remarkable wealth effect this can have. Experience shows that combining the cheapest stocks on price-earnings and price-to-book bases with the highest yielding stocks will deliver long-term outperformance with lower volatility, and that is what we have achieved.”

He says “dividend-paying stocks have not just outperformed non-payers over the long-term, they have done so in both bull and bear markets, and with substantial downside protection.”

Cullen adds: “While our overall philosophy is simple, it requires a disciplined and relatively sophisticated approach, particularly when you consider the current degree of market volatility. This has to be applied rigorously throughout the process, across our various screens, fundamental research and portfolio construction methodologies and, just as importantly, our sell discipline. There can be no room for sentiment, particularly when many investors remain hunkered in the bunkers of the financial markets.”

Cullen Capital has more than $13bn in assets under management.

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