18 years young, worth 18 billion euros: In an environment in which the aftermath of the bursting of the technology bubble was still being felt and numerous investors had turned their backs on the stock market in the face of massive price losses since March 2000, DWS launched DWS Top Dividende in 2003, one of the first globally invested dividend funds. 18 years later, the portfolio managed by Thomas Schuessler, with a volume of 18 billion euros, is not only the largest actively managed equity fund in Germany, but also one of the highest-volume funds in Europe. On April 28, 2021, DWS Top Dividende will celebrate its 18th birthday.
For portfolio manager Schuessler, there are two main reasons that have made DWS Top Dividende a popular classic in terms of asset management and retirement provision: "Firstly, because the portfolio does not fluctuate greatly due to its conservative nature and loses less in falling markets than the broad equity market. That lets our investors sleep more soundly at night," says the dividend expert. On the other hand, with its distributions in the form of dividends, DWS Top Dividende offers a regular and attractive income - and has done so for 18 years. "Especially in times of low interest rates, as we are currently experiencing, this is a very important aspect that investors greatly appreciate," explains Schuessler, who took over the fund two years after it was launched and has been managing it with a steady hand ever since.
18 years and still conservative
"Particularly in difficult times, the fund was able to demonstrate its defensive strength," says Schuessler, referring to the financial and economic crisis of 2008/2009, for example. Measured against the MSCI World Index, the DWS Top Dividende had already recovered losses in value two and a half years earlier than the broad stock market. Even at the start of the coronavirus crisis in February/March 2020, share price losses were lower compared with the market as a whole. Due to its conservative approach, DWS Top Dividende was only able to partially benefit from the subsequent strong recovery, as it was primarily U.S. tech stocks that led the rally and pay little or no dividends and are therefore not the first choice for Schuessler and team. The portfolio manager is more optimistic for 2021: "A much friendlier picture is emerging, in which high single-digit price gains are very likely," he predicts.
4.5 billion euros distributed in 18 years
"Currently, the fund's average dividend yield of 3.8 percent is twice as high as the MSCI World Index," explains the portfolio manager, who is also optimistic about dividend growth: "For our portfolios we expect dividends to grow by 8 to 12 percent in the current fiscal year. The strongest percentage increases are likely to be in the basic materials and IT sectors. This should have a positive impact on the fund's distribution this November," says Schuessler.
In terms of dividend payouts, the fund rushed from record to record, even in the corona year 2020. While many companies had to cut their dividends due to massive profit slumps or even cancel them completely, the companies in the DWS Top Dividende portfolio were hardly affected by this. As a result, the fund posted a new record distribution of 3.50 euros per share. Since its launch in 2003, DWS Top Dividende has achieved an average distribution yield of 3.4 percent and distributed a total of around 4.5 billion euros to its investors.
Investors who have been invested in the fund since the beginning and invested 10,500 euros at the day of its inception, for example - taking into account the front-end load - will have enjoyed a good 15,000 euros in the form of price gains and 10,280 euros in the form of dividends by the end of March 2021. If the dividend distributions were regularly reinvested, the increase in value amounted to an average of around 8 percent per year. "Over the long term, around half of the total return from equities comes from reinvested dividends," Schuessler emphasizes.
18 years faithful to its proven strategy
DWS Top Dividende has remained true to its conservative strategy and thus fulfilled an important investment objective – to ensure lower fluctuation than the overall market over the long term: The fund fluctuated 25 percentage points less than the broad stock market. For Thomas Schuessler, there is currently no reason to think about a change of strategy on the fund's 18th birthday: "At present, a large proportion of the stocks in our dividend universe are relatively favorably valued compared with the broad stock market and, above all, with growth stocks," says Schuessler, adding: "Dividend strategies are still very well suited for a basic investment."
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About DWS Group
DWS Group (DWS) is one of the world's leading asset managers with EUR 793bn of assets under management (as of 31 December 2020). Building on more than 60 years of experience, it has a reputation for excellence in Germany, Europe, the Americas and Asia. DWS is recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.
We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, which guides our investment approach strategically.
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