This year, the ex-dividend dates for some high-dividend companies have been significantly moved forward. From an overall perspective, high-yield assets may indeed exhibit a certain probability of decline following the ex-dividend date, but the duration tends to be short and the magnitude of the drop is limited. Whether looking at A-share or Hong Kong-listed dividend stocks, there is no significant mid-year decline effect on a monthly basis. The post-ex-dividend date impact on high-yield assets is likely to diminish gradually in the future, primarily due to the widespread adoption of the "multiple dividends per year" mechanism. This shifts the dividend distribution rhythm from concentrated to smoothed, substantially weakening the traditional "dividend capture - selling pressure" pattern triggered by the ex-dividend date. The main viewpoints of Gf Securities are as follows:
With ex-dividend dates for some high-yield companies significantly earlier this year, is it necessary to reduce exposure to dividend assets before June? Are high-yield assets in A-shares and Hong Kong stocks truly more prone to decline in the mid-year? On a monthly basis, neither A-share nor Hong Kong-listed dividend stocks show a significant mid-year decline effect. (1) High-dividend indices may still generate absolute returns in the mid-year. Historically in June, the CSI Dividend Total Return Index had a 45.0% probability of rising, with a median positive return of 0.1%. The Hong Kong Stock Connect High Dividend Total Return Index had a 54.5% probability of rising, with a median return of 1.3%. (2) Statistical analysis should consider both the mean and median to account for long-tail effects from extreme years. For example, the mean total return for the CSI Dividend Index in June is -2.2%, but the median is 0.1%.
High-yield assets may indeed have a certain probability of decline after the ex-dividend date. Some institutional investors planning to reduce their dividend holdings often do so after the ex-dividend date, i.e., after receiving the annual dividend, to realize profits. However, historical data suggests this impact is not substantial. (1) Examining index constituents: Low-volatility dividend stocks typically undergo an adjustment period of 15-30 days after the ex-dividend date, with declines ranging from 2% to 4%. Constituents of the Hang Seng Stock Connect High Dividend Yield Index usually adjust for about 10 days post-ex-dividend date, with declines of 1% to 3%. (2) Looking at leading high-yield individual stocks: Adjustment durations and magnitudes vary significantly. For example, after their respective ex-dividend dates, Industrial and Commercial Bank of China, Sinopec, China Yangtze Power, and China Shenhua Energy adjusted for 7, 60, 15, and 15 days, respectively, reaching the highest probability of adjustment (over 70%), with declines of -1.1%, -2.5%, -0.7%, and -2.2%. Given the considerable variation in post-ex-dividend date adjustment patterns across companies and differing ex-dividend dates, high-dividend indices do not exhibit a particularly pronounced decline effect during June and July.
The post-ex-dividend date effect on high-yield assets is likely to diminish gradually in the future. (1) This is mainly due to the large-scale adoption of the "multiple dividends per year" mechanism, which smooths the dividend distribution rhythm from a single concentrated event. This has substantially weakened the traditional "dividend capture - selling pressure" dynamic around the ex-dividend date. In 2024 and 2025, 704 and 856 companies, respectively, initiated interim dividends, whereas previously, the number of companies offering interim dividends typically did not exceed 200. As the dividend distribution rhythm shifts from a single, concentrated payment to multiple, smoothed payments, the traditional phenomenon of underperformance around the ex-dividend date due to "dividend capture and subsequent selling pressure" is expected to lessen significantly. (2) It is also noteworthy this year that, likely due to many companies adding interim dividends over the past two years, the ex-dividend dates for annual dividends have been notably moved forward. For instance, Industrial and Commercial Bank of China and Agricultural Bank of China shifted from mid-July in the past to mid-May, while China Construction Bank moved its date to mid-May last year. If selling pressure following the annual dividend does materialize this year, it could potentially occur earlier, around mid-to-late May.
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