Good Yield Hunting: Dividend Equities
With interest and saving rates likely to remain ultra-low, the demand for income will continue to remain strong and this should provide support for income/ dividend paying equities.
As the darling mega-cap technology stocks continue to mark new highs, investors may also look to diversify their equity risks. With higher quality and less stretched valuations relative to high growth stocks, income equities tend to have defensive properties that can lead to lower drawdown characteristics during challenging markets.
So, what would be one of our top picks within the global equity income space?
Fidelity Global Dividend Fund
What are the Key Characteristics of this fund?
- Global equity fund offering an attractive dividend – targeting to achieve at least 25% higher dividend yield than the MSCI AC World Index.
- Seeks to identify to companies that offer dividend income with long term capital growth:
(1) Attractive Value, (2) Better Quality, and
(3) Consistent and Growing Dividends
- Employs disciplined bottom-up fundamental research to avoid “value traps” – i.e. poor quality cyclicals with unsustainable dividends.
Why this Fund? 3 Reasons:
- Stable Income & Lower Drawdowns: The fund’s investment approach has allowed it to consistently increase its dividend and shown more resilience in the face of market volatility. Current payout: c.2.7%
- The People: PM Daniel Roberts has been at the helm of the fund since its launch in 2012. He is part of the Equity Income team and is supported by Fidelity’s global pool of over 150 research analysts.
- Consistent track record: Relative to global income equity peers, the fund has been a standout since launch, outperforming by ~43% since 2012.
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*All investments come with risks and you can lose money on your investment. Invest only if you understand and can monitor your investment. Diversify your investments and avoid investing a large portion of your money in a single product issuer.
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