Despite the Bank of England’s historic decision to make back to-back interest rate rises, interest rates could still lag inflation for the medium to long term.

This presents investors looking for income with a challenge. Returns were historically low even before the onset of the coronavirus. However the economic fall-out from Covid-19 has exacerbated the low yield environment.

With this in mind, Shares has highlighted a selection of top performing global income funds and investment trusts that have consistently outperformed.

Liontrust Global Dividend Fund (B9225P6), and Baillie Gifford Global Income Growth Fund (0577253) both fulfill this remit. Moreover the JP Morgan Global Growth and Investment Trust (JGGI), also boasts an impressive performance record.

The £390 million Liontrust Global Dividend fund is managed by Storm Uru and James Dowey. The fund has a formal objective of delivering a net target yield of at least the net yield of the MSCI World Index every year and the potential for long term (five years or more) capital growth.

The managers aim to invest in companies that are positively exposed to powerful trends, or have distinct and differentiated characteristics that will result in consistently above market returns over the long term.

The fund is overweight both information technology (23.9%) and financials (15.43%).

From a geographic perspective the United States is the largest country weighting  (58%), followed by China (10.5%) and the UK (7%).

Top holdings in the fund include Constellation Software (3.6%), Safran (3.4%), Stryker (3.3%), and Tencent Holdings (3.3%).

The £844 million Baillie Gifford Global Income Growth Fund is run by James Dow and Toby Ross.

It looks to invest in companies which can deliver both a dependable income stream and real growth in income and capital.

Dow and Ross focus on long-term growth and income, rather than short-term yield, because they believe this will deliver better outcomes for our clients over time.

Dow argues ‘Once an investor embraces the new paradigm for income, focusing on long-term dividend-growth by searching for companies like Microsoft rather than wasting their time on business models of yesterday like coal or big oil, a huge universe of opportunities opens before their eyes.’

Industrials (17.3%) and financials (17.1%), are the largest weightings in the fund, followed by technology (16.1%) and consumer staples (14.9%)

Key holdings include Microsoft, Novo Nordisk and Fastenal.

JP Morgan Global Growth and Income (JGGI) is the outstanding global income performer in the investment trust space.

The trust recently changed its dividend policy to allow it to pay its dividend from capital. This enables it to invest in better performing sectors. It targets a payout of 4% of its net asset value.

The manager is focused on building a high conviction portfolio of typically 50 to 90 stocks, drawing on an investment process underpinned by fundamental research. 

JP Morgan is able to draw on its international research network and bring together global reach and local expertise.

The fund has a very diverse sector exposure with media and pharmaceuticals and medical technology being the most significant. However the trust is devoid of high concentration overweight positions in specific sectors.

The largest geographic weighting is towards the US (62.1%). The next largest is to Europe and Middle East (24.2%), with emerging markets representing 4.9%.

Key holdings include Amazon, Microsoft, Alphabet and McDonalds.

‹ Previous2022-02-10Next ›