M & G Global Dividend Fund Class X Accumulation

This fund will launch on 18th July and will be managed by Stuart Rhodes, a member of M&G’s Global Equity team. He believes income strategies outperform over the longer term and looks at three main areas which could be the key drivers of performance. These include companies with undervalued business franchises, those undergoing internal change and those facing external change.

The fund will typically have between 50 to 70 holdings and Stuart Rhodes will adopt a buy and hold strategy, keeping the portfolio turnover low which in turn will minimise trading costs within the fund. While he looks for companies that can hopefully consistently grow their dividends, he will also look for businesses with capital discipline in the search for both income and capital growth, although an investment may fall as well as rise in value.

At launch, the M&G Global Dividend Fund will target a yield of 4% (variable and not guaranteed) with the aim being to exceed the yield on the FTSE World Index which is currently 2.5%. We expect the geographical allocation to be biased towards the US and Europe where the manager is finding many opportunities in the higher yielding stocks. This positioning will be the result of careful stock selection rather than geographical allocation.

M&G has an excellent Global Equity team and following the recent market falls, the timing of this launch could prove beneficial in the long term.