Stocks about to get a $400 billion dividend boost

Here’s a fresh reason to celebrate the end of a lousy quarter in global equities: The new quarter kicks off with the potential adrenaline boost of as much as $400 billion in dividends.

“We think it is no coincidence that spring is also a seasonally strong period for equities,” Morgan Stanley strategists including Andrew Sheets wrote in a note to clients Wednesday.

Up to $400 billion is set to be paid into investor accounts between March and May, they calculated. “April in particular tends to be a strong month for global equity returns.”

(More: Dividend ETF sees 27th week of inflows)

https://www.investmentnews.com/wp-content/uploads/assets/graphics src=”/wp-content/uploads2018/03/CI114894330.PNG”

Stocks in Hong Kong and emerging markets show particularly strong returns in April, according to the analysis. In the world of bonds, high-yield and emerging-market debt also shows a “spring uplift,” though a less pronounced one than in equities, the strategists wrote.

Spring is seasonally the worst time to be long Treasuries, the strategists wrote. U.S. government bonds show below-average returns from April to May, then see a better performance into the third quarter, the study showed.

Meantime, many will be happy to move past a quarter in which a strong January stock-market rally gave way to a volatility blow-up in February and a technology-led rout in recent days, along with a surge in short-term borrowing costs and pledges of further U.S. policy interest-rate hikes.

“Amid higher volatility and a dragging risk-free ‘anchor,’ this could provide some welcome temporary relief,” the Morgan Stanley team said of the coming dividend wave.

(More: Dividend ETF sees 27th week of inflows)