While global funds seem to have gathered most of the business so far, there are also opportunities in Asia that investors should consider.
Bestinvest’s Jason Hollands (pictured) said: "Dividends used to be a peculiar feature of the UK market but the dividend culture is spreading."
"Asian income is an interesting area: a decade ago dividends were not generally a feature of these markets as many companies were controlled by family interests." "That dividends are now becoming well established in Asia is a sign of improved shareholder friendliness and better standards of governance."
Newton Asian Income
Jason Pidcock’s five crown-rated fund was picked by every single analyst contacted for this piece and also sits on the FE Select 100 list.
The £2.35bn fund is a top-quartile performer over one, three and five years in the IMA Asia Pacific ex Japan sector – beating the majority of funds that are not constrained by having to pick yield-paying stocks.
Performance of fund vs sector and benchmark over 5-yrs
Source: FE Analytics
AWD Chase de Vere’s Patrick Connolly said: "Newton is an investment company that has proved it is a competent and consistent long-term performer in Asia and won’t take big investment bets."
"Income investors tend to be more cautious and are less able to cope with capital losses."
The fund is available for a minimum initial investment of £1,000 and has a total expense ratio of 1.66 per cent. It is currently yielding 4.98 per cent.
First State Asian Equity Plus
This $2.7bn offshore fund – domiciled in Ireland – has five FE crowns and is managed by FE Alpha Manager Martin Lau.
Mark Dampier, head of research at Hargreaves Lansdown, said: "It’s probably the first Asian Income fund of them all. We have been buying it for 10 years and I think it’s superb. There isn’t really anyone else."
Data from FE Analytics shows that the fund is a top-quartile performer in its FO Equity – Asia Pacific ex Japan sector over one, three and five years.
Performance of fund vs sector and benchmark since July 2003
Source: FE Analytics
Investors will need $1,500 to gain access to the fund, which has a total expense ratio (TER) of 1.67 per cent.
Schroder Asian Income Maximiser
Connolly says he uses this for clients who need a high level of income now and are willing to sacrifice capital gains to achieve this.
"They sell covered call options on the underlying stock and use that to boost the income, so if markets take off they will be left behind, but it will pay more income than other equity funds."
Our data shows Thomas See and Richard Sennitt’s portfolio is currently yielding 6.94 per cent.
It was only launched in June 2010, but Connolly does not see this as a problem.
"We are happy with Schroders as a house that has experience of running this type of portfolio," he said.
The fund is available with an initial investment of £1,000 and a TER of 1.71 per cent.
Aberdeen Asian Income
Hollands also rates this closed-ended fund, which has five FE crowns and a TER of 1.4 per cent.
FE Trustnet reported last week that the trust was launching a new class of shares to allow investors to gain access at a cost of just 2 per cent of their capital, rather than the current premium of more than 6 per cent they currently have to pay.
The yield on the fund is currently not exceptional – at 3.3 per cent – but the trust is a top-quartile performer over three and five years, beaten by only Aberdeen Asian Smaller Companies and Scottish Oriental Smaller Companies.
The portfolio has made 129.07 per cent over the longer period, and 75.08 per cent over the shorter.
Schroder Asian Income
The Share Centre’s Andy Parsons rates this five-crown portfolio as a fund for income-seekers looking to branch out overseas.
It is another top-quartile performer over three and five years, although its 10-year figures slip into the third quartile.
Richard Sennitt has run this fund since 2001 and its three-year volatility of 15.1 per cent is below the MSCI Asia AC Pacific ex Japan index’s score of 19.7 per cent.
It is available for an initial investment of £1,000 and has a TER of 1.7 per cent.
The fund is currently yielding 4.5 per cent.