Global Equity Income Funds Which Funds Ranked Highest

• Our latest dataset reviewed 58 funds in the Investment Association (IA) Global Equity Income sector.

• The sector averaged 10.37% over 6 months, 18.19% over 1 year, 47.89% over 3 years and 66.72% over 5 years.

• Only 20.7% of funds achieved a top performing 4 or 5 star Yodelar Rating.

• 60.3% received a weaker 1 or 2 star Yodelar Rating by ranking among the lower performers in the sector over the periods analysed.

• Investors holding global equity income funds should check whether the income fund they hold has performed competitively against sector peers and still fits their wider portfolio.

Global equity income funds are often held by investors who want income, long-term growth, or a combination of both. For some investors, these funds may be used to support retirement income. For others, they may be used to add dividend-paying companies to a wider portfolio.

That can be useful, but the income label should not create false confidence.

A fund may sit in the IA Global Equity Income sector and still deliver a weak overall performance return compared with sector peers. It may pay income but lose ground on capital value. It may also overlap with other global equity funds already held in the portfolio.

This article reviews the sector using fund performance, sector ranking and Yodelar Rating. It does not rank funds by income yield, the level of income paid or the consistency of distributions.

That distinction matters. A fund with a lower overall return may still have played a role for an investor seeking a particular income outcome. Equally, a fund with a strong performance return may not necessarily provide the income level, income consistency or risk profile an investor needs.

The performance table is therefore the starting point, not the full answer. Investors using global equity income funds should understand both sides of the picture: what the fund has delivered overall and whether the income objective still fits the wider portfolio.

Global Equity Income Fund Performance Summary

Across the IA Global Equity Income funds reviewed, 20.7% received a top performing 4 or 5 star Yodelar Rating. In contrast, 60.3% received a poor 1 or 2 star Yodelar rating by ranking among the bottom of the sector for performance over the periods analysed.

How Yodelar Rates Fund Performance

Yodelar Ratings do not assess the level of income paid, the current yield or the consistency of income distributions. This means an income fund can have a lower rating if its overall performance ranks poorly against sector peers, even if it has paid income to investors.

Global Equity Income Sector Performance

The IA Global Equity Income sector delivered positive average returns across each period reviewed.

The sector average return over 5 years was 66.72%, based on the performance data reviewed. However, the average hides a wide gap between the highest and lowest returning funds.

Some global equity income funds ranked strongly against sector peers on overall performance. Others delivered much weaker returns, despite sitting in the same sector and often being held by investors for income-related reasons.

For investors, the key point is that a global equity income fund should not be held simply because it pays income or has a familiar name. It should be reviewed against competing funds in the same IA sector, while also considering its income objective, risk, charges and role within the wider portfolio.

5 Top Performing Global Equity Income Funds

The table below shows five of the strongest 5-year performers in the IA Global Equity Income sector, based on fund performance. These funds are not recommendations. They are included to show where the strongest historic overall returns were achieved within the sector.

Artemis Global Income ranked 1st in the sector over 5 years, with a return of 157.29%. Thornburg Equity Income Builder and Royal London Global Equity Income also delivered strong long-term returns and ranked highly against sector peers.

These results show which funds produced the strongest overall returns in the sector over the period reviewed. However, investors should not judge these funds by return alone. Global equity income funds can hold different regions, sectors and company types. Some may be more focused on capital growth, while others may place greater emphasis on dividend-paying companies or income discipline.

A fund with strong overall performance may still not be the right income fund for every investor. The income required, the level of risk being taken, the capital value, the charges and the role of the fund all need to be considered.

5 Lowest Returning Global Equity Income Funds

The table below shows five of the lowest 5-year performers in the IA Global Equity Income sector. These funds are not automatically unsuitable, but they may warrant closer review.

These figures show why positive returns need context. Several funds in the lower table still produced positive 5-year returns, but ranked poorly against competing funds in the same IA sector.

For example, Trojan Global Income returned 27.09% over 5 years, but ranked 48th out of 51 funds. Baillie Gifford Global Income Growth returned 31.06%, but ranked 47th out of 51.

The issue is not simply whether a fund made money. The issue is whether it delivered a competitive result for investors using that sector.

Income And Total Return Both Matter

Income investing is not just about the income paid today. It is also about what happens to the capital supporting that income.

A fund can pay income but still deliver weak overall performance. If capital value falls or lags sector peers for long periods, the portfolio may become less effective over time. This can matter for investors using income funds in retirement, where both income and capital sustainability may be important.

At the same time, it would be misleading to judge an income fund only by total performance. A fund may have a lower overall return because it has paid income out to investors, or because it has followed a more cautious income approach. That may be acceptable where the fund is doing the job expected of it.

This is why the review needs to go beyond one number.

Investors should ask whether the fund has delivered a reasonable balance between income, capital performance, risk and charges. They should also check whether the fund still has a clear role within the wider portfolio.

A strong income fund should not only sound attractive. It should be able to justify its place.

What Income Investors Should Review

Investors holding global equity income funds should review both the performance and the income objective.

This type of review helps investors avoid two common mistakes. The first is choosing an income fund based only on yield. The second is judging an income fund only by performance without understanding the income role it was meant to play.

The better approach is to review both together.

What Investors Should Take From The Data

The IA Global Equity Income sector contains funds with very different results.

The strongest funds delivered returns well above 100% over 5 years. The lowest returning fund delivered a return close to zero over the same period.

For investors, this creates a clear message. Holding a global equity income fund is not enough. The specific fund matters.

A portfolio may include an income fund because it was selected years ago, because it appears on a platform list, or because it has a familiar manager name. None of those reasons are enough on their own.

Investors should check whether the fund has ranked well against sector peers and whether it still has a clear role in the portfolio.

Get A Free Portfolio Analysis

Many investors hold income funds alongside global funds, UK equity funds and mixed investment funds without knowing whether those holdings overlap or how each fund ranks against sector peers.

Our free portfolio analysis reviews each fund individually, showing available 1, 3 and 5-year performance, sector ranking and Yodelar Rating. Yodelar Ratings are based on historic sector-relative performance and are not a guide to future returns.

The analysis can also help identify weaker-rated holdings, duplication, concentration, higher charges and funds that may no longer have a clear role.

It does not provide personal advice or recommend whether to buy, sell or switch any investment. It is designed to give investors a clearer view of their portfolio before deciding whether further review may be useful.

Speak To An Adviser

For investors who want to understand whether their current portfolio remains suitable, a no obligation call with an adviser from our advice partner, MKC Wealth, can help.

The discussion can cover current holdings, portfolio analysis results, income needs, long-term objectives, time horizon and attitude to risk.

Any personal recommendation would only be made after understanding the investor’s financial position, investment objectives and risk profile. Any recommendation would include a clear explanation of risks, costs and ongoing service.

Summary

Global equity income funds can play a useful role, but investors should not assume every fund in the sector has delivered strong results.

The sector averaged 66.72% over 5 years, but only 20.7% of funds achieved a 4 or 5 star Yodelar Rating. In contrast, 60.3% were rated 1 or 2 stars.

The difference between funds was wide. Artemis Global Income returned 157.29% over 5 years, while the lowest returning fund in the sector returned 0.37%.

For investors, the message is clear. Income funds should be reviewed against sector peers, not judged only by income level, fund name or positive returns.

Before assuming an income fund is doing its job, investors should check how it has performed against competing funds in the same IA sector.