Current low interest rates have created a low yielding investment environment. This means investors search for income from investments has become even more critical. The M&G Global Dividend Fund is designed to produce a yield in excess of both the UK market and the global average.
The fund has produced an exceptional return of 24.1% since launch, strongly ahead of the average return of 5.1% from the peer group, the IMA Global Growth sector, and 11.6% from the FTSE World Index. This excellent performance puts the fund in the top decile since inception, ranking it 7th out of 185 funds within the IMA Global Growth sector and been awarded an A-rating by OBSR.
The fund focuses on companies that can deliver consistent dividend growth, "dividend achievers". These companies contribute to performance by being able to deliver consistent dividend growth - rather than just a high absolute yield. Fund Manager Stuart Rhodes believes that screening exclusively for yield is a flawed strategy as a high yield is often a sign of a company in trouble or with limited growth potential. He believes that companies that can grow their dividends in a sustainable manner over time represent much more attractive investments. Typical dividend achievers held in the fund include companies such as consumer products group Johnson & Johnson and pharmaceuticals group Roche that have grown their dividend for staggering 48 and 22 years consecutively.
So how has this good performance been achieved? Unsurprisingly in a bottom-
up, stock-picking fund such as this, the majority of the performance has been generated by stock selection, with companies such as Nestle, Methanex and Cochlear all significant contributors. Geographic diversity and the fund's very low exposure to the UK, (it represented only 8.4% of the fund, at the end of August 2010), and hence to sterling, have contributed to the strong performance given the overall weakness of sterling over the period since the fund's launch.
To find out more about the M&G Global Dividend Fund, visit www.iviewtv.co.uk
For Financial Advisers only. Not for onward distribution. No other persons should rely on any information contained within this article. Source of performance: M&G Statistics and Morningstar, Inc. as at 31.08.10, unless otherwise stated, bid to bid with net income reinvested, Sterling Class A Shares. Rating as at 31.08.10 and should not be taken as a recommendation. This Financial Promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Services Authority and provides investment products. The registered office is Laurence Pountney Hill, London EC4R 0HH. Registered in England No. 90776.
Succeeding co-founder Simon Rogerson
Janus Henderson Global Dividend Index
More than 10 million shares allocated
Long-term strategic holding
What made financial headlines over the weekend?