A fair spread
We should also consider that diversification is a big part of the appeal of these funds. Looking solely at the UK for income presents an investor with challenges.
The mega-cap stocks in the FTSE 100 can be limited to just a few sectors. Widening the net to global companies means investors can access more sectors and greater opportunities in other, maybe faster-growing economies.
There is also the potential benefit of generating dividends in other currencies when concern over the value of the pound is high.
The hunt for yield has been well documented. Amid the loose monetary policies across the globe, interest rates have fallen and yields have fallen with them. Cash deposits pay nothing or virtually nothing, while bond yields collapsed as central banks hoovered them onto their balance sheets.
Yet many investors need an income to live on, and equities that offer secure and growing dividend streams are an attractive port of call for investors who need yield.
Finally, it is easy to understand the appeal of a globally diversified, high-quality fund where the asset allocation and securities selection decisions are made for you, particularly if performance is good and the charges are transparent.
Clearly there are many things to watch out for when considering global equity income funds, some which are less obvious than others.
Among the obvious is fund selection. A poorly managed fund, of whatever flavour, is to be avoided, as is one that has opaque charges. This is not about the level of the charges but the ability to understand them and the subsequent value for money you get from paying them.
We have already touched on the spread of the actual underlying investments. You need to be sure this makes sense. If it is your only investment the importance of this is, of course, magnified.
However, the thing that worries us most is risk.
