Josh Duitz, Global Head of Income for Aberdeen — Manager of the Aberdeen Total Dynamic Dividend Fund — talks about where he is finding success in generating elevated income at a time when rate cuts are making it harder for investors to earn easy yields. Duitz discusses international investing and whether the rally overseas can continue in the face of reduced currency impacts, where high-flyers like the Magnificent Seven stocks fit in with his portfolio (or don’t), and which sectors he is finding most attractive right now.
CHUCK JAFFE: Josh Duitz, global head of income for Aberdeen, manager of the Aberdeen Total Dynamic Dividend Fund is here, we’re talking dividend investing, it’s time for The NAVigator. This is The NAVigator, where we talk about all-weather active investing and plotting a course to financial success with the help of closed-end funds. The NAVigator is brought to you by the Active Investment Company Alliance, which is a unique industry organization representing the full spectrum of the closed-end fund business from investors and users to fund sponsors and creators. If you’re looking for excellence beyond indexing, The NAVigator will point you in the right direction. And today it’s pointing us in the direction of equity income investing and more, my guest is Josh Duitz, he is the global head of income and the head of listed infrastructure at Aberdeen, and in those roles he’s manager of the Aberdeen Total Dynamic Dividend Fund, that is ticker AOD, and I might as well disclose it right here, that’s a fund that I own. He’s also manager of ASGI, the Aberdeen Global Infrastructure Income Fund, you can learn more about both by going to Abrdn.com, and better yet, if you know the ticker symbol go to AbrdAOD.com, just add the tickers, it will take you directly to the fund page. Now if you want to learn more broadly about closed-end funds, interval funds, and business-development companies, go to AICAlliance.org, that’s the website for the Active Investment Company Alliance. Josh Duitz, great to have you back on The NAVigator.
JOSH DUITZ: Always great to be here, Chuck. Always love talking to you.
CHUCK JAFFE: We’ve got a market that’s flirting with record highs, we’ve got a lot of nervousness. When people get nervous, dividends calm those nerves, but when you’ve got valuations where they’re at, it makes that play a little bit tougher. So where are we in the investment cycle for you as an income-oriented, dividend-oriented investor?
JOSH DUITZ: It’s actually really interesting. Let’s just talk about the markets as a whole before we even focus on income. Just thinking about where we are, it’s quite remarkable. We’ve had two years of massive gains before this year, and this year, another year of strong gains, which is quite remarkable, especially where we were in April after Liberation Day. Now you know, as an investor, that AOD’s actually a global fund, and what’s actually interesting about this year is that international markets are actually outperforming the US. That used to happen all the time, it used to be sometimes the US outperforming and sometimes international markets, we’re now seeing international markets up, which really hasn’t happened, the US has been so strong of recent. So that’s a bit different today, and you look outside of the US, valuations are cheaper and dividends are higher, so we like the fact that also international markets are outperforming, especially because we’re a global fund and we think for investors it’s actually important to have that diversification. You look very broadly, currency-adjusted or non-currency-adjusted markets are outperforming, from Brazil and Europe, you see the FTSE, Italy, Germany, Japan, Hong Kong, all out performing, so I think it’s quite interesting. And dividends themselves are actually growing and are continuing to grow, so globally we expect dividends to grow high single digits this year, and probably 7% or so next year, so from a dividend investor we actually think it’s a good time to stay invested in the marketplace.
CHUCK JAFFE: I want to touch on a couple things from that answer. One of them is you just talked about high single digits in terms of dividends globally, that is higher than what you’re likely to see on a lot of the big domestic stocks and the common domestic names, so is that bringing you overseas? When you talked about currencies, do you believe that much of the rally we’ve seen this year, where we got the overperformance in international, was because of currency discrepancies or was it because the valuations there are so much better? Because if it’s because of the currencies, that might be coming to an end, if it’s because of the valuations, that might just be beginning.
JOSH DUITZ: Great points. Let me just talk about those first. First when I said high single digit, that’s high single digit dividend growth, not the fact that these markets have high single digit yields, these markets have higher yields than the US, typically you’ll find globally 1.5 to 2X dividend yield, so they are higher dividend yielding markets. And then in terms of the outperformance, I first said currency-adjusted, and then I mentioned markets that are not even currency-adjusted are just outperforming, and I think that’s because of the US, the valuations are higher so it’s beginning to catch up, some of the international markets, because the valuations are a bit more attractive there.
CHUCK JAFFE: We’re now in a rate environment where we’re into a rate cutting cycle, that should inherently increase interest in dividends because they’re much more competitive and the risk-free rate is going down. A fund like yours has proven that it can deliver significantly above just the dividend payout, and yet because it’s a closed-end fund currently trading at a discount, investors can buy it relatively speaking on the cheap. I talk to investors all the time who are looking at closed-end funds, who on the one hand they love that idea, that would be a very strong selling point to them, and on the other hand they don’t feel like they can trust, how does this fund deliver so much more than a standard dividend achievers fund? How do you answer that question?
JOSH DUITZ: Let’s talk about our yield, because there’s several different buckets of our yield. For many years our yield was roughly 7%, we’ve recently increased the yield to have a managed distribution, so now we have an even higher yield. So to unpack it, let’s start with that roughly 7% distribution rate, and that was a yield of the natural yield of the stocks that we own of 3% plus some dividend capture there to make up the difference. There’s several reasons we like dividend capture, if you want just a high yielding fund, you can achieve it in several different ways. One, you could buy a fund that has covered calls, if you buy a fund that has covered calls, that caps your upside, and markets overtime generally goes higher, so we don’t want to do that. If you want to buy a fund, certain dividend funds only focus on high dividend paying stocks. If you do that, generally why does a stock have a high dividend? Because it’s probably either going to cut their dividend or they’ve gone [inaudible 0:07:16], so we want to avoid that, and we also want a diversified fund so you can invest in only certain sectors that have higher dividend yields such as utilities or consumer staples. We want a diversified global portfolio, so that’s why dividend capture allows us to deliver a high dividend yield without giving up that upside of the covered calls and having the diversification, so we still have tech investments even though they have lower yields, because we can make up that dividend from dividend capture. I think that’s the beauty of dividend capture, and that’s what has allowed us to outperform our peers. Since we’ve increased our dividend even above that 7% yield, roughly 7%, because obviously it depends on the NAV, we do now return some capital as well. The point is, we think that 7% yield is consistent, as long as your total return is above that, which we have been delivering since I’ve taken over the fund about 13 years ago or so, and now that managed distribution just gives you a little bit extra return of capital, so this way investors are getting more cash back in their hands.
CHUCK JAFFE: Let’s talk a little bit about the areas you find particularly attractive in these market conditions, and while we do that, let’s also make sure we touch on the fact that AOD, and again it’s the Aberdeen Total Dynamic Dividend Fund, holds some but not all of the Mag Seven. I’m curious, how did you decide which ones you’re going to be in and which ones you’re not going to be in? These days that’s the way a lot of managers are adding value, is you kind of have to have some of them but you don’t have to have all of them.
JOSH DUITZ: So to be fair, we are a dividend-paying fund, we’re looking for companies that pay dividends and grow their dividends over time. Historically those companies have outperformed in the market, so when we look at the Mag Seven, there’s certain ones we’ll buy because they pay dividends, and others we won’t buy because they don’t pay dividends. So even NVIDA, which quote “pays a dividend”, it pays a fraction of a dividend, I think it’s a penny or so, or few pennies every quarter, so it doesn’t meet our qualification of a dividend-paying stock. We will not own stocks that don’t pay dividends in this fund, so that eliminates some of that. Amazon doesn’t pay dividends, so we don’t own that. Obviously, we all know how great performers the Mag Seven were and continue to be, so we still like names like Google and Apple and Microsoft, are all part of this fund. Being this is a dividend-paying fund with a high dividend yield, again that dividend capture allows us to own and participate in some of the upside of the market, but yet we’re still a dividend-paying fund, so we have defensive characteristics of other dividend-paying funds, so that’s what we think is a nice mix for AOD specifically. In terms of we look at sectors that outperform, underperform, we are, as I mentioned earlier, we like diversification, so we’re not just trying to chase the sectors that have outperformed, we like that diversification because we’re not macro investors. Thinking about what has worked and what hasn’t worked, especially this time of year as we’re preparing for next year, when we look at tech and what’s going on with the AI ecosystem, we still like that, we think we’re in early innings. We have to be careful because clearly valuations have become elevated for some of the names, which we try to avoid or we trim if we own them, but beyond just the technology there, we have utilities and energy that’s supporting that. Because what’s a bottleneck for data centers and artificial intelligence? It’s actually the energy infrastructure. So you need that, more utilities, we need more power, so we’re invested not only in the AI, the tech part of it, but we’re also invested in the utilities and also the midstream pipelines which are providing that power. Many investors thought the midstream pipelines over the next few decades were going to not need natural gas anymore, so those pipelines are going to become obsolete. That has been proven incorrectly, we actually need more pipelines to support the power demand, so that’s a trade that we’ve had on and that we continue to like. When you think about the consumer, and consumer staples and discretionary really have not worked this year, but what may make it work next year, the One Big Beautiful Bill permanently extends the lower tax rates from the 2017 Tax Cuts and Jobs Act. It removes taxes on tips and overtime and raises the standard deduction for both single and married filers, it also adds new deductions for seniors on car loan interest while increasing SALT deduction cap. Since the IRS will not update, they’re withholding the tax schedule until 2026, next year, taxpayers are likely to see larger refunds early in the year. That trend has historically led to higher spending, so the consumer’s going to have a nice tailwind going into next year, so that’s another area that we’re looking to focus on.
CHUCK JAFFE: Josh, great stuff. We finished all this without ever even going over to the infrastructure side, so we’ll just have to have you back on The NAVigator soon to pick up on that one, but thanks so much for the time today.
JOSH DUITZ: Would love to come back, Chuck. Thank you again, really appreciate you having me.
CHUCK JAFFE: The NAVigator is a joint production of the Active Investment Company Alliance and Money Life with Chuck Jaffe, and yes, I’m Chuck Jaffe, I’d love it if you’d check out my hour-long weekday podcast by going to MoneyLifeShow.com or by searching for it wherever you find your favorite podcasts. Now to learn more about closed-end funds, interval funds, and business-development companies, go to AICAlliance.org, that’s the website for the Active Investment Company Alliance. Thanks to my guest Josh Duitz, global head of income and head of listed infrastructure at Aberdeen, he’s manager of the Aberdeen Total Dynamic Dividend Fund, that’s ticker AOD, and the Aberdeen Global Infrastructure Income Fund, ticker ASGI. Get more information on the firm at AberdeenInvestments.com, or use the ticker symbols, go AbrdnAOD.com or AbrdnASGI.com to get details on the funds. The NAVigator podcast has something new for you every Friday, make sure you never miss an episode by subscribing or following along on your favorite podcast app. We’ll be back next week with more closed-end fund fun, until then, happy investing, everybody.
Recorded on November 14th, 2025
