Not all income is created equal with Helen Mason | Schroders

**Helen Mason** (0:00)
Yield is a symptom, it's not a strategy. Things tend to happen in the bond market before you see it in the equity markets.

**Alec Renehan** (0:06)
And so, franking credits and dividends aren't enough to get you over the line?

**Helen Mason** (0:09)
They're really not.

**Alec Renehan** (0:10)
Equity Mates!

**Bryce Leske** (0:12)
Welcome to another episode of Equity Mates, a show where we explore what is possible in the world of investing. If you've just joined us for the first time, a massive welcome to our community. My name's Bryce.

**Alec Renehan** (0:21)
And I'm Rene, and today we're gonna talk about something that is blasphemous in Australian investing circles. Are dividends overrated?

**Bryce Leske** (0:29)
That's right. And today, our expert joining us to unpack that question is Head of Credit Australia at Schroders, Helen Mason.

**Alec Renehan** (0:37)
Now, to be clear, that's Helen's view that dividends are overrated. It's not Bryce and my view. But Helen doesn't pull her punches in this interview. She tells us why she thinks dividends are overrated. She also talks about private credit, one of the hotter income plays in markets in 2026, and why that might be overrated as well. And then we turn to the bond market, public credit, and talk about why investors should give it a second look.
And Helen is right on the front line of what's happening in the Australian credit market, which is really having a moment now. Australian credit as a market has grown massively over the years. I think we're now the third biggest in the world.

**Bryce Leske** (1:18)
And Schroders are making that market more accessible for retail investors.
We discussed throughout this episode, the Schroders Australian High Yielding Credit Fund. It's an active ETF. The TIKR is H-I-G-H high. So if you're interested in getting exposure to income, then absolutely check this out. We'll put a link in the show notes.

**Alec Renehan** (1:37)
And we should just say before we get into it, a massive thank you to Schroders for sponsoring this episode and helping us keep all of our content free. But Bryce, with that said, let's get to our conversation with Helen Mason about why not all income is credit equal and why dividends might be overrated.

**Bryce Leske** (1:53)
Helen, welcome back to Equity Mates.

**Helen Mason** (1:54)
Thanks for having me back. Yes.

**Bryce Leske** (1:58)
Last time you were on, you brought the prop to talk us through the capital stack. So we are waiting with bated breath for this interview to see if you've bought something of just as much fun, but we'll find out. Let's start with Australia's dividend obsession because you believe something that is almost blasphemous in Australian investing circles that dividends are overrated. Why is that?

**Helen Mason** (2:23)
It is quite blasphemous, but when I moved to Australia 19 years ago, I couldn't actually believe Australia's obsession with equity, franking credits, and it's about as common as meat pies and football. And it's something that people talk about, the family barbecue and housing and real estate. That's the other obsession. This isn't about me bashing equity. Equity is a great asset class when you think about capital growth. But what I want to talk about today is income. And I want to talk about the other options that are available for investors now that we're in a new regime.
So actually, if you think about historically, investors haven't had it wrong, sitting and being in equity and getting their frank dividends, particularly pre-COVID, post-GFC. In those years where yields on the public asset classes generally were pretty low, equity for income did stack up. So I'm not suggesting that historically it's been the wrong thing to do, but just as we're in this new regime of slowing growth, higher inflation, higher base rates, what does that actually mean for opportunities now for investors?

**Alec Renehan** (3:35)
So franking credits and dividends aren't enough to get you over the line?

**Helen Mason** (3:38)
They're really not, and because if you think today actually, the ASX 200 is giving you a 12-month dividend yield of roughly 3.2, you frank that, that is 4.2 percent. We know there are some pretty good opportunities out there, and I'm here to talk about public credit today, and we know that even the Australian Public Credit Index is 5.36 today, and that's an A-rated high-quality index, and if we refer back to my capital stack, it's higher in the capital stack than equities. But I'd really like to use my prop to explain income options, if that's all right. You're getting an early prop.
I'm bringing them in early because I think they're going to set the scene, but I don't know if you know this story about the three little pigs.