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PERFORMANCE OF FUNDS VS SECTOR AND INDEX
average dividend growth of 12.3 per
cent over the past 15 years.
Tracy Zhao, investment research
analyst at The Share Centre, says
Japan looks attractive from an
income perspective, pointing to high
cash balances – median dividend
cover is about twice the level of the
UK – and corporate governance
reforms brought in by prime minister
Shinzo Abe, which have encouraged
companies to return cash to
investors. Again though, the market’s
current yield of about 2 per cent is
less than spectacular.
Jochen Breuer, manager of the
Fidelity Asian Dividend fund, claims
Asia ex Japan offers the best of both
worlds: the region has a relatively
high yield of about 3 per cent, while
powerful tailwinds such as a young
population and a growing middle
class have helped deliver annual
Top dog:
BNY Mellon Global
Income
Hughes says BNY Mellon
Global Income is a useful
option for income investors
who want a significant
exposure to technology,
as this makes up about 18
per cent of the portfolio.
However, he says there
is a lot else to like about
Nick Clay’s fund: “It has a
TRUSTNET
Name
Full circle
Given his status as a global equity
income manager, Saldanha’s most
overweight region may raise some
eyebrows: “We have a lot of exposure
to the UK through some
insurance names, so
Prudential and Legal &
General, and we have a
bit of Rio Tinto on the
mining side,” he says.
high quality and very clear
approach in that it only
buys stocks when they
are yielding more than the
market and sells them when
this figure moves back in
line with the average. We
view this as a core global
income fund.” BNY Mellon
Global Income is the best
performer in the sector over
the past five and 10 years. It
is yielding 2.96 per cent.
Safety first:
Fidelity Global
Dividend
Teodor Dilov, investment
analyst at interactive investor,
has opted for the Fidelity
Global Dividend fund, which
he says “has proven to be a
solid performer in the past,
generating outperformance
in more difficult markets while
keeping up in strongly rising
markets. Its current yield is
1yr (%)
3yr (%)
5yr (%)
10yr (%)
BNY Mellon Global Income 21.8
Murray International Trust 16.45 20.53 53.8 150.35
Fidelity Global Dividend 20.52 31.28 75.2 N/A
IA Global Equity Income 18.63
23.29 54.24 143.42
MSCI World 22.74
33.06 78.95 201.24
30.45 85.89 199.86
Source: FE Analytics
“It was really interesting for me
because we spoke to a lot of global
investors and it was clear many of them
have been shunning the UK for a large
period due to the perception of a ‘hard
Brexit’ and the impact it would have.”
The manager says the valuation
discount on the UK was being applied
so indiscriminately that it had become
impossible to ignore.
reasonable, and dividends are
paid annually.” The FE Invest
team is also a fan, pointing out
that manager Daniel Roberts
has grown the dividend by
at least 4 per cent every year
since joining, and calling it “an
obvious choice for cautious
investors searching for a
global source of income”. It is
yielding 2.8 per cent and has
made 75.2 per cent over the
past five years.
“It almost felt like election day
was a bit of a light-bulb moment
for investors: all of a sudden they
switched on and went ‘oh wow, the
UK is investable’,” he adds.
“But we were making the case that
investors needed to be looking at
the UK for a large chunk of the year
because the valuation discount was
just too large.”
The closed-ended
option:
Murray International
Dilov also likes the Murray
International trust, which
he says provides a globally
diversified portfolio of high-
quality stocks and offers
an attractive yield relative
to its peers. “In addition
to generating long-term
capital growth and income,
the trust can offer investors
the benefits of capital
preservation during periods
of market weakness,” he
adds. The trust is also
suitable for investors who
want higher exposure to
emerging markets, with
manager Bruce Stout saying
this is the only place to find
“economic orthodoxy”. It is
yielding 4.26 per cent and
has made 53.8 per cent over
the past five years.
trustnet.com