Dividends have played a significant role in long-term equity returns, reinforcing the importance of income as part of total investment performance.
Featured in IFA Magazine, analysis by Bowmore Asset Management (using data from Alpha Terminal, February 2026) shows that dividends accounted for 52% of the total return from the UK’s leading large-cap equity index over the past ten years.
While income investing fell out of favour during a period when growth and technology stocks outperformed, investors are increasingly reassessing higher-yielding shares as valuations in some growth sectors have become stretched.
The importance of dividends is not limited to the UK. Bowmore’s research also found that 56% of total equity returns in the Asia Pacific region came from dividends over the twenty years to November 2025 (Jupiter AM, Bloomberg).
James Woodman, Investment Director at Bowmore Asset Management, said:
“The multiples on many growth stocks no longer look attractive which is why investors are looking at higher yielding shares.”
“Growth shares have taken a hit recently and are at risk of larger correction. At the same time corporate governance reforms globally continue to drive dividend growth.”
He added:
“Dividends are not a sign that a company has run out of ideas. They are a sign of financial strength and rational capital allocation. Returning excess cash to shareholders allows investors to redeploy it into new opportunities rather than leaving it tied up in projects that may not generate attractive returns.”
The findings highlight the important role dividends can play in long-term equity returns, particularly as investors reassess the balance between growth and income.
IFA Magazine: Dividends delivered 52% of FTSE 100 total returns over last decade – IFA Magazine
Bowmore Asset Management Ltd is authorised and regulated by the Financial Conduct Authority.
The value of your investments can go down as well as up, so you could get back less than you invested. Past performance is not a guide to future performance.