The dividends distributed by the main French values have provided these last few months a yield of about 3.5%.

The yo-yo of the Stock market retained the attention of the media and investors that the amount of dividends of the shares. Each day, the info strings we drink comments frantic on the jolts of the CAC 40 index of leading French values, or the Dow Jones index of the New York stock Exchange. A bit like if the donor individual, had the nose on the odds of housing prices without taking care of their rents.

And yet the dividends of the shares are the returns of the most dynamic among those of the principal families of the investments, since their progression is not governed by regulatory provisions, as is the case for the rents of the real estate, whether residential or office. The dividends of the shares are intended, in the long term, to keep track of the profits of the companies listed in the stock Exchange. “In France, the companies distribute nearly 40% of their profits in dividends, a higher level than in many countries, which places the CAC 40 index in good position in terms of performance,” says Philippe Joly, manager of the fund Action Selection Performance in DOM Finance.

At the level of the CAC 40 index at the end of October 2018, around 4 980 points, the dividends distributed over the last twelve months by the main French values give a yield of about 3.5%. In the short term, this performance may seem incidental compared to the magnitude of the fluctuations experienced by the stock. Since the beginning of the year, the CAC 40 index has lost 6.3 per cent (to 30/10), following a 9.3% increase in 2017. But, in the long term, dividends are a source of income dynamics at the reach of all investors, provided they accept the risk of the Stock market. Neither the dividends nor the value of capital are not guaranteed, they can move up or down.

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The dividend rise from 3% to 6% by year

Since 2001, the dividends of the great values French as well-known several folds, as evidenced by the evolution of dividends paid by the fund Lyxor CAC 40 (see the graph) : they have fallen by 23% between 2001 and 2003, nearly 15% between 2008 and 2010, 24% between 2011 and 2013, and even 7.2% in 2017, compared to 2016. But between these periods of crisis, the multinational companies of the CAC 40 have also known the boom years. The dividends paid by the fund Lyxor CAC 40 have more than doubled between 2003 and 2008, they have rebounded by 32% in 2011, and rose from 25% between 2013 and 2016.

Up to now, in spite of these yo-yo, the dividends of the CAC 40 index has always recovered. And in the end, they show progressions robust according to the periods selected. The low of 2003 at the peak of 2016, the dividends of the first forty French values have increased 121%, or an average increase of 6.3% per year. Over a period of hectic, between 2001 and 2018, the dividends of CAC 40 still rising to 58 per cent, a revaluation average of 3.3% per year.

With growth of approximately 3% to 6% per year, on average, depending on the period, the dividends of the shares are rising in any case faster than inflation, which makes it an investment well-appreciated by pension funds and other pension funds concerned about preserving the purchasing power of their recipients. As A comparison, inflation in these times remained around 1.4% per year, on average, in France.

To build income with the dividends of the shares, investors can buy shares listed in the stock Exchange. But it must be addressed, and many give up because they find it too complicated. Open a securities account or a PEA, however, is not more tedious than purchase a booklet or a life insurance. Just be careful with the costs, especially the annual fees, or custodial fees, very punitive in the banking networks.

most of The online brokers offer pricing without custody transaction fees extremely low for investors wishing to invest in shares in the long term. Boursedirect.fr, Fortuneo.fr, Binck.fr and Boursorama.com are the most competitive.

dividends distributed by the companies of the CAC 40 index, materialized here by the dividends paid each year by the fund Lyxor ETF CAC 40, are less volatile than stock prices themselves.

GPouzin/Deontofi.com

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many investment funds are demanding a management policy consisting in selecting stocks for the dividends strong. There are almost 200 funds of this type investing in every country in the world, recognizable by their name often includes the word dividend, return, “income” or “yield” (revenue, or performance in English).

If they are on the whole more regular than the profits of firms or the market price of their shares, dividends are not guaranteed. “The increase in the performance of the shares reflects more often a drop in the price of an increase in dividends,” says Eric Labbé, manager of the fund CPR Euro High dividend. He picks solid companies with the means to distribute high dividend. Its portfolio, including shares distributed on average 5.6% of the dividends (before management fee), includes companies such as Orange, BNP or the real estate company Klépierre, but not EdF, the dividends on which are considered vulnerable.

other fund preferred shares the dividends on which report less than average, but seem to be more sustainable, such as Action Selection Performance. “These yields are not necessarily high, at around 1.5% on average, but they are stable historically. The performanthis finish is obtained on average one-third of the dividend paid, and for two-thirds of the growth of the business,” explains his manager.

still others exclude altogether certain sectors. The index fund BNP Paribas Easy Equity Dividend USD UCITS ETF bet on a basket of u.s. companies, dividends are promising, with the exception of banks and other financial companies. While BNP Paribas has distributed in 2018 a dividend of 3.02 euros per share, the yield of 6.5% that represents income in relation to the course of the October 24, reflected more worry than confidence of investors. The share was down 32% since its peak in January, and its dividend could be reduced in 2019.

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Lyxor CAC 40 fund follow

Rather than buying shares directly, it is possible to cash in the dividends of the companies of the CAC 40 index with a single investment : the fund Lyxor CAC 40. It is not a question of a sicav classic as one can subscribe to his bank, but of an Exchange-traded fund, or ETF (exchange traded fund in English). To buy it, it is necessary to pass an order of Exchange with its code FR0007052782. This fund follows the CAC 40 index with only a 0.25% management fee per year. It was 48,56€ on the 18th of October. If one wants to invest, for example, about 1000 euros in this fund at this price, it must purchase 20 units.

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Then, the dividends have come in alone, twice a year. Last July, the fund Lyxor CAC 40 has paid a first dividend of 1.59 €, corresponding to all the dividends distributed by the companies in the CAC 40 since the beginning of the year. A supplement is paid at the end of the year to take account of the dividends of the second half. Last December, it was 11 cents, bringing the dividend that is distributed by this fund Lyxor CAC 40 to 1.70 € for a year, a yield of 3.5% before taxes, over the end of October. Relapses and rebounds spectacular of the Stock market dwarf the flow quiet and dividends, but they remain a source of income of the most dynamic.