The M&G Global Dividend Fund was set up three years ago to hunt down companies around the world that can deliver “a winning combination of earnings and dividend growth”, says Jeff Prestridge in The Mail on Sunday. Given that the fund has delivered a total return of 56% since its launch, “the investment strategy is paying off handsomely”. The fund has outperformed all others with a “global income bent”.
It is managed by 31-year-old Stuart Rhodes, a rising star at M&G who operates a strict stock selection system. Companies have to maintain or increase their dividends year on year to be considered for selection – any that cut dividends are removed from the portfolio.
Brazil is a popular region with Rhodes and 8% of the fund is invested there. “Just to be listed on the exchange, you must pay at least 25% of your profits out in dividends each year,” says Rhodes in The Daily Telegraph. As a result the fund’s biggest holding is Banco do Brasil. But Brazil isn’t the only country with a progressive approach to dividends. “The US is primarily the leading light of dividend discipline. There are nearly 100 companies in America alone that have been able to increase their dividend for 25 years in a row or more.” That’s “a pretty staggering statistic”.
Juliet Schooling Latter, head of research at Chelsea Financial Services, is a fan. Rhodes’s focus on income makes for “a compelling investment process”, she says in The Mail on Sunday. “Since launch, the fund has weathered some of the toughest times for markets, yet it has generated strong returns.”
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M&G Global Dividend Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Banco Do Brasil | 4.00% |
| HSBC Holdings | 3.50% |
| Chubb Corp | 3.20% |
| Novartis AG | 3.20% |
| Methanex Corp | 3.20% |
| Prudential | 2.90% |
| Roche Genusscheine | 2.90% |
| Kon DSM | 2.90% |
| Telefonica SA | 2.70% |
| Reynolds American Inc | 2.70% |