a well-managed fund which could be considered as an alternative to the M&G Global Dividend Fund
For new investors choosing the right sector or country can be daunting. Often they are drawn to the best performers, and those being advertised. This strategy could work but the reverse is also true with investors being disappointed because they haven’t fully understood the investment strategy.
We have reviewed several Global Growth and Income Funds. Some have a heavy bias to the US, some are more globally diversified and some like Baillie Gifford Global Discovery and Scottish Mortgage are more suited to higher risk investors.
We recently reviewed the M&G Global Dividend Fund, our conclusion was that it was a well-run fund which is defensive in nature and wouldn’t significantly outperform the index. This is no-way negative and in fact blended with high risk global funds this could act as a good safety net.
There are however alternative options and one such fund which may have slipped under people’s radar is the Artemis Global Income Fund.
Comparing the two one can see the performance from the Artemis Fund is strong but the volatility is slightly higher 11.14% against 10.68%. Other factors to consider includes the fund size which is £1.4 billion against £9.4 billion with M&G which means there are areas it can invest that perhaps M&G would find it harder. M&G is skewed towards the mega cap space whereas Artemis is mid to large cap with around 10% of the fund in the small cap space.
Two other interesting facts for investors to consider is that the Artemis Fund has around 30% in the US and 46% in Europe whereas M&G have 60% in the US and Canada and 16% in Europe. Turning to the holdings the Artemis Fund has 96 holdings whereas M&G is 44.
So there are slight variants. Speaking to the manager he pointed out that many investors choose the fund to sit aside UK Income Funds because it avoids large cap UK dividend players. For us we would see this in our portfolios as a volatility dampener against some of the more volatile global funds. It has a shorter track record to M&G and this may deter some investors but for investors prepared to take slightly more risk this is a fund to consider.
We met the manager shortly after the fund was launched and have followed since. This update looks at the fund four years on from its launch.