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Can dividends deliver outperformance?

It’s no secret that Australian investors love their dividends. But recent Morningstar research has found that a portfolio of higher dividend-paying shares actually meaningfully outperforms over the long term.

But by how much, you ask? Great question.

Over a 45 year period, the research house found that Aussie dividend payers beat the S&P/ASX 200 benchmark by 3.7%, on average, every single year, delivering investors a return of 14.8% per annum.

Unfortunately, getting the right exposure to these Aussie high yielders isn’t as easy as one may think. We reviewed the performance of the largest six “dividend” or “high yield” ETFs available locally, and all but one have underperformed the S&P/ASX 200.

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