Global equities are often a reliable source – but with global growth slowing, will companies continue to pay out dividends?

The latest Henderson Global Dividend Index reveals that global dividends reached a new record in 2014, up 10.5 per cent to $1.167trn (£797bn). The main engine for soaring global dividends was the US.

The Global Dividend Index climbed to 159.9 at the end of 2014, meaning global dividends have grown nearly 60 per cent in five years, according to Henderson.

While dividends globally are looking fairly healthy, it is the developed markets that are contributing the most.

Mining was the only US sector to see dividends decline last year, with all other sectors recording increases. Europe also had a strong year for dividend payouts, with a headline increase of 12.3 per cent. Spain, Switzerland, the Netherlands and France all performed strongly, although Germany and Italy disappointed.

Alex Crooke, head of global equity income at Henderson Global Investors, says developed markets were “leading the charge” last year, but he is more cautious about the outlook for dividends in 2015.

He explains: “Since we introduced our 2015 forecast, three key things have changed: the global economic outlook has clouded; the oil price has collapsed to a six-year low; and the US dollar has surged in value.

“We don’t expect developed market oil companies to reduce their dividends in 2015, but there is a strong likelihood that emerging market producers will pay out markedly less this year as their profitability comes under pressure.”

Mr Crooke now expects dividends to grow by 0.8 per cent in 2015 to $1.176trn – only marginally higher than last year.

James Davidson, manager of the JPM Global Equity Income fund, points to the current record-high market capitalisation for US equities as a portion of global equities, with the US now accounting for 58 per cent of the MSCI World index.

He favours European dividend-paying equities at the moment, with yields in the region double those of the US.

Mr Davidson remarks: “Buybacks have been one of the most powerful outperformance styles in the US, and this trend seems finally to be coming to Europe.”

The Henderson Global Dividend Index notes that Japanese companies distributed 5.9 per cent more to their shareholders on a headline basis last year, in spite of a falling yen. Corporate governance has been under scrutiny in Japan but Mr Davidson says the corporate sector in the country is “undergoing a transformation” which is improving dividend yield.

“Previously famous for hoarding cash, these companies are now being targeted by new rules around governance, corporate taxation and accounting, which is having a positive impact,” he says.

The 2015 Fidelity Worldwide Investment survey of 159 equity and fixed income analysts shows analysts expect industry returns and dividend payouts in Japan to improve more than in any other region.

Henk-Jan Rikkerink, head of equity research at Fidelity Worldwide Investment, adds: “Three out of four of the analysts surveyed are assuming that Japanese companies will be increasing their dividend payouts to shareholders over the coming 12 months.”

China also fares well in the survey, though, with more than 80 per cent of the analysts who cover the country predicting dividends will be maintained this year.

Mr Rikkerink comments: “A cautious approach prevails for China as economic growth slows. However, a systemic crisis does not appear likely in 2015.”

Ellie Duncan is deputy features editor at Investment Adviser