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Christine St Anne is Morningstar's online editor.

Despite all the market swings and turmoil, one shining light in the Australian sharemarket remains - high dividends.

Dividends, supported by franking credits, have been a crucial component of equity income in the Australian market.

Indeed, for many professional investors, income has emerged as a crucial source of return as Australian companies continue to struggle with growth.

According to the latest Morningstar sector wrap-up of Australian large-cap fund managers, investment managers have boosted their investments in income stocks such as Telstra (TLS) and the big four banks.

These managers have been buying up these companies as they look through "the financial gloom overseas and focus on the impressive dividends on offer".

The report, however, did note that although investing for income may be a better bet, it is unlikely to provide the same high level of return to which investors have become accustomed.

Investors may therefore have to revise their expectations of returns from Australian equities and look offshore.

Global stocks, however, are not known for giving investors the same level of dividend returns as Australian companies. Other countries also do not have the benefit of our franking system.

Regardless, many large multinationals are continuing to amass large levels of cash on their balance sheets and there are moves to return some of this cash back to shareholders.

Morningstar US equity strategist Josh Peters has been running income-dividend portfolios for US investors since he joined the company back in 2004.

He says the relatively low payout ratios of companies indicate there could be more room for dividend growth.

In his reports, Peters looks for companies that are consistently profitable, relatively unburdened by debt and "whose managers run against the tide to treat shareholders like actual partners".

It is in these companies where he finds large, reliable and growing dividends.

Companies in his portfolios include the Vodafone Group, Kinder Morgan Energy Partners, Proctor and Gamble, and Royal Dutch Shell.