Introduction
Australia has long been one of the highest-dividend-yielding regions among developed markets, with its long-standing strong culture of companies paying dividends and its unique dividend imputation system. Exhibit 1 shows the trailing 12-month dividend yield among major developed market indices as of June 30, 2025. The S&P/ASX 200 posted a 3.28% dividend yield, ranking second, only slightly below the 3.49% dividend yield of the S&P United Kingdom BMI.
Despite the high dividend yield in the Australian market, there are reasons why market participants may want to also pay attention to companies that pay dividends outside of the Australian market.
First, looking at the total dividend amount in the global equity space, due to the size of the capital markets, Australia contributed about 5% and is ranked in the 6th position (see Exhibit 2). The majority of company dividends in the developed markets come from the U.S., Japan, Canada and a few European countries, with their large market capitalization of publicly listed companies. There are many dividend opportunities beyond the Australian market.
Second, the correlation between an Australian index and a global dividend index that excludes Australia has been relatively low and sometimes below 0.4 (see Exhibit 3). This low correlation could serve as a tool of diversification that may lower overall risk and enhance the overall risk/return profile.
Third, equity market participation; some of the markets, like the U.S., had strong performance over the past decade. In 2025, European markets such as Germany also demonstrated a strong run YTD. Despite the dividend yield level of some developed markets being lower than the dividend yield level in Australia, the strong price return could contribute to the overall total returns. How can an index focus on dividends while also having an eye on markets outside of Australia? The S&P World Ex-Australia High Yield Dividend Aristocrats® Select Index (S&P World Ex-AU HYDA Select) was designed with this in mind.
In this paper, we introduce the S&P World Ex-Australia High Yield Dividend Aristocrats Select Index, a pioneering index that applies the Dividend Aristocrats framework in a regional and sector-balanced approach. This index offers Australian market participants a unique tool for viewing the global dividend market, while emphasizing the quality and sustainability of the dividend yield generated. Through our analysis, we aim to illuminate the historical performance and characteristics of this index.
