ASX Dividend Stocks: A 10-12% yielder positioned for a tech pullback
GQG Partners yields over 12% and carries no debt, but accelerating fund outflows are eroding the dividend behind it.
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Mentioned
KEY POINTS
- GQG Partners offers a forward yield of 12.4% on Macquarie's numbers, backed by a debt-free balance sheet and a payout of about 90% of earnings
- Net outflows accelerated to US$3.2 billion in June, the third straight monthly increase, dragging funds under management to US$156 billion and pulling Macquarie's earnings and dividend forecasts lower
- Macquarie is Neutral rated on GQG, with a $1.35 target.
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GQG Partners (GQG) offers a compelling double-digit dividend yield, but the underlying business has flatlined for the last two years and earnings are forecast to go backwards from here.
Macquarie has the stock on a forward yield of 12.4%. Encouragingly, earnings will more than cover the payout, and the balance sheet sits in a net cash position. The problem is that money is leaving its funds faster every month, and as that continues, the dividend behind that yield is set to shrink.
The yield case
GQG manages over US$150 billion across four equity strategies (International, Global, Emerging Markets and US) and pays out about 90% of its earnings as dividends. That payout sits on an asset-light model, with no debt and a growing cash position. Almost all of GQG's fees are charged as a percentage of funds under management rather than on performance, so the revenue is relatively predictable, as long as the asset base holds its size.
One thing to note is that these dividends are unfranked. GQG is a US-domiciled business, so there are no franking credits attached, which lowers the after-tax value of that headline yield for anyone holding through a low-tax structure like an SMSF.
Outflows are accelerating
Well, here's the problem.
GQG reported US$3.2 billion of net outflows in June, worse than US$1.9 billion in May and US$1.4 billion in April. Over the first half of 2026, clients pulled US$15.1 billion. The International and Emerging Markets strategies saw the heaviest redemptions.
GQG positioned away from AI tech in late 2024 and into early 2025. Chief Investment Officer Rajiv Jain later acknowledged, "We exited the AI trade too soon in early 2025", noting that the fund was also too defensively positioned over tariff concerns and failed to pivot back to risk-on when conditions changed. At the same time, the fund avoided AI names like Nvidia, Micron and SK Hynix, and instead opted for exposure to sectors like utilities, property and insurance.
The table below shows Macquarie's estimates of flagship fund performance relative to each fund's benchmark. All have underperformed across every time frame.
Fund performance vs. benchmark | 1 month | 3 months | 6 months | 1 year | 3 years |
|---|---|---|---|---|---|
Emerging Markets | -12.35% | -11.45% | -22.46% | -39.48% | -10.83% |
Global Quality | -6.31% | -11.34% | -7.37% | -23.24% | -9.29% |
International | -5.90% | -5.96% | -9.76% | -19.22% | -4.30% |
US Select Quality | -6.46% | -14.69% | -5.16% | -23.63% | -8.78% |
Source: Macquarie Research, July 2026
Now it's worth noting that most of these funds delivered a positive return over the past six months and beyond. The issue is that they underperformed the market indices clients measure them against (by a wide margin), and that gap is what tends to trigger withdrawals.
Earnings and dividend set to shrink
Because GQG pays a fixed share of earnings, a falling asset base means a falling dividend. Macquarie trimmed its forecasts again after the June update.
Macquarie forecasts (US$) | FY25a | FY26e | FY27e | FY28e |
|---|---|---|---|---|
Net revenue (US$m) | 808 | 767 | 676 | 643 |
EPS (¢) | 15.8 | 14.5 | 11.9 | 10.8 |
DPS (¢) | 14.6 | 13.5 | 11.2 | 10.1 |
Source: Macquarie Research, July 2026
The bottom line
GQG offers a rare thing on the ASX, a double-digit yield backed by a debt-free balance sheet and a business that returns most of what it earns. This isn't one of those stocks that have been battered and now offer a high trailing dividend yield. That said, GQG's portfolio positioning has resulted in a slow bleed, with the stock down 13.1% year-to-date and 25% over the past twelve months (adjusted for dividends).
On the flip side, if the high-flying AI and tech trade begins to unravel, then GQG is clearly positioned for strong relative outperformance, given its defensive tilt.
