Q: Mawer Global Fund has just experienced a down year and I assume they are experiencing significant redemptions. December 2024 they paid a dividend of 20 cents per share. December 2025 they paid a dividend of $2.30 per share.
Is the large dividend simply an enticement to keep people invested? Why would they paid such a large dividend when they just experienced a year of less than stellar results?
Thank you
Paul
Is the large dividend simply an enticement to keep people invested? Why would they paid such a large dividend when they just experienced a year of less than stellar results?
Thank you
Paul
5i Research Answer:
No; fund dividends are a direct reflection of fund activity, and managers do not get much discretion in what is paid. The dividend likely reflects historical investment positions that were sold for gains. If funds see redemptions, then they often need to crystallize some gains in order to fund these payouts, and this can result in higher capital gains realized and thus larger dividends paid.