Liontrust Global Income, Lazard Global Equity Income and Artemis Global Income are among the funds that have paid out some of the IA Global Equity Income sector’s highest dividends over recent years, although the best payouts have come from a handful of specialist mandates. 
With a total of 55 members and total assets under management of just under £19bn, the IA Global Equity Income sector is much smaller than the IA UK Equity Income peer group.
But with concerns such as dividend concentration risk and the uncertainty created by Brexit impacting on sentiment towards the UK, income investors have been encouraged to look beyond home shores for funds.
With this in mind, FE Trustnet has reviewed the performance of funds within the IA Global Equity Income sector to find out which have performed best over the past five years when it comes to the task of generating an income for their investors.
Source: FE Analytics
The chart above shows the fund that has paid out the most income over the five years to the end of 2017. While the average fund in the peer group paid out £2,433.34, Aptus Global Financials distributed £3,265.91 to its investors over the period.
The £358.9m fund is managed by Toscafund Asset Management’s Johnny de la Hey and his team of sector specialists; as its name suggests, the fund focuses on companies in the financial services space, with top holdings including Russian online retail financial services provider TCS Group, Italian bank Banco BPM and US online discount stock brokerage E-Trade Financial Corporation.
In his latest update, de la Hey said: “We are frankly extremely positive even if, like others, we must note the recent strong run in equity markets. The real difference with other sectors is not only are parts of the financial space still trading historically cheap in both absolute and relative terms but the fundamentals are now unequivocally improving.
“Gone are the burdens of massive fines, ever increasing regulation, low growth, negative rates and capital raises. In their place are the watering down of previous regulation, strong economic growth, rising interest rates, NPL [non-performing loan] sales, M&A and capital return via buybacks and dividends.”
Another specialist fund – Premier Global Infrastructure Income – has come in second place after paying out a total of £3,196.61 over the five years to the end of 2017. Managed by Claire Long and James Smith, the five FE Crown-rated fund targets a regular and growing income through a portfolio of infrastructure companies such as SSE, China Everbright and DP World.
From a total return point of view, the £68.5m fund has outperformed its average peer over the past five years after making 64.52 per cent. However, it is the sector’s worst performer over one year after falling 5.64 per cent; during this period, many infrastructure portfolios have suffered in part due to concerns that interest rates could rise faster than expected.
Not all of the IA Global Equity Income sector’s highest income payers have a specialist mandate. In third place is James Inglis-Jones and Samantha Gleave’s £169.4n Liontrust Global Income fund thanks to its £2,878.22 payout.
The fund makes use of Liontrust’s Cashflow Solution process, which sees the managers focus on companies that generate significantly more cash than they need to sustain their planned growth, yet are lowly valued by investors on that measure. Top holdings include UK asset manager Ashmore Group, South African mobile communications company Vodacom Group and French oil & gas stock Total.
Source: FE Analytics
Lazard Global Equity Income, which has Patrick Ryan as lead manager with Andrew Lacey and Kyle Waldhauer as deputies, is in fourth place with a total payout of £2,848.14. The process behind the fund seeks out companies with high, sustainable dividend yields, dividend growth and capital appreciation potential
Sarasin Global Higher Dividend comes in fifth after paying out £2,845.50 to investors. Managed by Guy Monson, the £404.7m fund targets an income that is at least 50 per cent higher than the MSCI World index.
Jacob de Tusch-Lec’s Artemis Global Income fund comes next with a five-year income payout of £2,706.04. The fund has been a persistent favourite in the sector since launch and has generated its second highest total return over five years, making 89.77 per cent.
Next up is Nick Clay and Ian Clark’s Newton Global Income fund, which is the IA Global Equity Income sector’s largest member with assets of £5.5bn. It has paid out £2,525.80 to investors in the five years considered in this research.
In order to see at how funds in the peer group have performed when it comes to dividend growth over recent years, we filtered the sector to find out how many have lifted their payout in every one of the years we looked at.
Aptus Global Financials comes out on top here as well after growing its payout by an average of 33.3 per cent a year over the five-year period. This is largely down to the 81.5 per cent jump in its dividend between 2013 and 2014.
Invesco Perpetual Global Equity Income has the second best record of income growth, after posting an average rise of 17.4 per cent. Its total payout over the period was £2,311.39, which is a little below the average of £2,433.34 and ranks the fund 13th out of the 27 with a long-enough track record.
Source: FE Analytics
The £913.7m fund is managed by Invesco Perpetual chief investment officer Nick Mustoe but makes use of the expertise across the firm’s equity income team. Simon Clinch is the US regional specialist, Stephanie Butcher a Europe ex-UK regional specialist, Mark Barnett works on the UK, Tim Dickson on Asia and Tony Roberts on Japan.
Two more funds have lifted their income payouts in each of the years and by an average of more than 10 per cent. Schroder Global Equity Income’s dividend rose by an average of 16.1 per cent a year over the period we examined while Aviva Investors Global Equity Income was up by 15.5 per cent.