MSCI World Index: Comparing Dividend Stability and Earnings Volatility

An insightful chart from J.P. Morgan Asset Management’s Mid-Year Investment Outlook 2025 highlights the contrast between dividend and earnings drawdowns within the MSCI World Index, which represents large and mid-cap stocks across global markets. Historically, dividends have proven far more resilient during downturns than corporate earnings, underscoring the steady nature of shareholder payouts compared to profit cycles. This long-term trend continues to demonstrate why dividends remain a key indicator of financial strength and stability in global equity investing.

Income-oriented strategies are also likely to prove relatively defensive. In an earnings contraction, dividend growth typically pulls back by roughly half that of earnings, helping to buffer total returns from stock price drawdowns (see Exhibit 16). With payout ratios at low levels and corporates pulling back from capex, investors might expect even greater dividend resilience in a slowdown scenario today than has been typical historically.

I avoid daily market commentary and honestly don’t care if the NASDAQ closed up 1% or down 1% today, but these market insights can provide a nice overview of what people are worried about along with some thoughtful context.