21 Feb $780 million was missed on Scrip dividends in 2018
New Scorpeo data shows that $780 million was missed on scrip dividends in 2018 due to sub-optimal elections. Although the amount of missed value was lower than 2017, there is no indication that asset managers are doing a better job optimising their elections.
Data shows that during 2018 on average cash was more often optimal than stock compared to 2017. With most asset managers defaulting to cash, less value was missed. Although the 2018 missed value number was lower than previous years, it was still more than the missed value in 2013 ($755 million). That year was followed by four year of missed value exceeding $ 1 billion. If asset manager do not act, there is every chance that 2019 will see another billion dollars lost.
Since Scorpeo started tracking the missed value on scrip dividends in 2011, over $9bn of value has been lost.
What should asset managers do?
Asset managers should run a value analysis and determine how much money they missed due to sub-optimal elections. Asset managers have a fiduciary obligation to know if they are missing money for their clients.
Scorpeo offers value analysis on scrip dividends from 2011. Go to https://www.scorpeo.com/value-analysis-tool/ for more details.
What should pension funds do?
Pension funds that have outsourced the management of their assets to third party asset managers should check if their asset managers are missing money due to sub-optimal elections. Pension funds may have outsourced the election decisions to their asset managers, it is still their responsibility to ensure their asset managers are optimising their elections.
Scorpeo offers value analysis for pension funds. As most election data is held by the custodians, there is no need for pension funds to collect data from all their asset managers individually. Go to https://www.scorpeo.com/value-analysis-tool/ for more details.
Scorpeo’s mission is to provide transparency in relation to missed value on corporate actions due to sub-optimal elections and to provide solutions to asset managers, pension funds and custodian to capture this missed value and return it to their investors. For more information check out our video on https://www.scorpeo.com/scorpeo-value-capture-programme/.