Gone are the days when investing in high yielding shares meant few options beyond the UK.
A growing pool of overseas, dividend-paying companies means it is possible to gain both global exposure and diversification without reducing the income enjoyed from a portfolio. In 2013, 29% of global businesses yielded 3% or more. Of these companies, 92% are located outside the UK, with regions such as Asia gaining in significance.
The diversification benefits of investing overseas are clear. As well as expanding the range of opportunities in sectors such as pharmaceuticals and tobacco, where UK dividend-paying companies have a strong presence, investing overseas provides access to sectors not so well represented in the UK, such as technology.
No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.
A global focus also introduces exposure to overseas currencies. Any weakness in sterling would make dividends from foreign companies more valuable to UK-based investors, although if sterling were to strengthen the value of the dividends to UK investors would fall.
Analysing and assessing the vast pool of global income stocks requires an experienced fund manager, and we believe James Harries fits the bill. He uses Newton's trademark approach to identify themes set to shape the investment landscape, overlaying this with companies he believes are most likely to benefit.
The fund's global thematic approach has proved a success over the long term; investors at launch in November 2005 have enjoyed 127.2% growth on their investment. Our analysis suggests the fund comes into its own in tough market conditions, while also capturing much of the upside of a rising market. However, like all stock market investments it will fluctuate in value and investors could lose money.
The Newton Global Higher Income Fund is our favoured choice for diversified, international equity income exposure and is held in our HL Multi-Manager Income & Growth Trust. In our view, James Harries and the team at Newton have the resources to outperform their peers over the long term.
Geographical Breakdown of the Newton Global Higher Income Fund
Source: Newton, as at 31.12.14
|Annual performance||Feb 10
Past performance is not a guide to future returns.
Source: Lipper IM, figures to 2 February 2015. This fund takes its charges from capital, which increases the yield but reduces the potential for capital growth. From 1 April the fund's name will change to Newton Global Income.
Newton Global Higher Income
|Net initial charge||0.00%|
|Ongoing charge (OCF/TER)||0.80%|
|Net ongoing charge||0.65%|
|Yield variable and not guaranteed||3.73%|
The charge to hold funds in the Vantage Service is 0.45%. Where savings are paid as loyalty bonus, they may be subject to tax in the Fund & Share Account.
Please read the key investor information document in addition to the information above.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.