Admans: How to get global income
Sheridan Admans, investment research manager at The Share Centre, explains the benefits of investing globally for income and highlights the Lazard Global Equity Income fund.
By Sheridan Admans, Investment research manager at The Share Centre
Saturday August 04, 2012
In recent years the sources of income available to investors has grown as fund managers have sought to build products that offer more diversified returns. As an investor in the UK, equity income investing is generally serviced by investing in financial institutions, tobacco, utilities, oil and telecom companies native to its shores.
However, a global equity income fund allows for better diversification potential through sector, economic and demographic opportunities. This should also help diversify away from country specific risk and give the manager exposure to best in breed globally, rather than settle for the best in the UK market.
The low interest rate environment in the west is leading more investors to consider the opportunities for improving and diversifying their income returns. In doing so they have sought funds that invest in companies with attractive dividend growth and the strategy and policy to match. In addition, as the world becomes ever more inter-reliant, the listing of a company on a specific stock market does not necessarily provide a true representation of the main areas of its business and service operations.
The
Lazard Global Equity Income fund was launched back in October 2007 and is co-managed by Patrick Ryan, Andrew Lacey and Kyle Waldhauer. The underlying investments will generally have a bias towards large and mid caps and a minimum of 90% of the stock chosen will already be held within other Lazard investment strategies.
The managers of this fund have certain restrictions as to where they can invest. Most notably, no more than 25 per cent of the portfolio can be invested in emerging markets, a maximum of 10% is allowed in companies with a market cap of less than $3bn and no more than 35 per cent in any one sector.
The funds current largest geographical exposure is North America with 34.1 per cent, followed by a strong representation in Continental Europe. The top three sectors the fund has exposure to are financials, telecommunication services and basic materials.
Performance of fund vs sector since launch
Source: FE Analytics