Chatfeild-Roberts pans ‘politically correct’ dividend attacks

Jupiter fund manager John Chatfeild-Roberts has defended dividends against what he claimed was a ‘politically correct’ attack on the payouts amid the coronavirus crisis.

‘There appears to be a politically correct feeling that paying dividends is bad,’ he said, speaking on an online presentation for investors in his Jupiter Merlin funds.

‘We on the Merlin team would thoroughly disagree with that and call on public companies to maintain their dividend payments if they are financially able to do so.’

Chatfeild-Roberts, who heads the team running the £6bn multi-manager funds, argued dividends were a vital part of the financial system.

‘Dividends are not just the preserve of “rich capitalists”. Dividends are the things that oil the wheels of pension funds, life insurance policies,’ he said.

‘They are part of the system and if companies choose to not pay their dividends because they just feel like it, we are going down a plughole that will be quite difficult to reverse. I feel very strongly about that.’

Companies listed on the UK stock market have cancelled billions of pounds of dividend payments as governments have placed economies under lockdown to contain the spread of the coronavirus pandemic. Financial administration company Link has forecasted UK dividends could more than halve this year under its worse case scenario.

Many have been forced into the cuts by a plunge in revenues as large portions of the global economy have ground to a halt under lockdowns.

Banks cut their payouts under pressure from the Bank of England, which also praised the ‘prudent decision’ by a number of insurers to shelve dividends.

See also  Debt dilemma: how to avoid a crisis in emerging nations

Debate over dividend payments has centred on those companies accepting financial support from the government during the coronavirus crisis, or seeking to raise more money from investors.

Artemis Income manager Andy Marsh last month warned companies to ‘think carefully’ about accepting support if they wanted to proceed with dividend payments.

Fund group Schroders meanwhile told companies that if they sought to raise more money from shareholders ‘we would expect their boards to suspend dividends and to reconsider management’s remuneration’.



Please enter your comment!
Please enter your name here