Charlie McCann, investment research analyst at Titan Square Mile, takes a look at IA Global Equity Income and finds the sector has been enjoying a renaissance in recent times.
At the end of March 2026, the Investment Association Global Equity Income sector remains the 17th largest IA sector, with around £29bn in assets, representing just shy of 2% of the IA universe. It is therefore relatively small compared with the non-income-requiring IA Global sector, with just under 60 funds to choose from.
To be included in this sector, funds must invest at least 80% of their assets globally in equities. Funds must be diversified by geographic region and intend to achieve an historical yield on the distributable income in excess of 100% of the MSCI World index yield at the fund’s year end on a three-year rolling basis, and 90% on an annual basis. As a consequence of the income requirement, the sector tends to be less stylistically diverse than the IA Global sector. However, options do still vary.
Over the past 12 months, two new funds have launched, both of which are actively managed strategies. In this sector, passive funds continue to make up a far smaller percentage, although the largest fund in the sector remains an index tracker. Global equity income funds appear to be continuing the renaissance that gathered pace in 2025, with the IA Global Equity Income sector average having kept up with the MSCI World index over 2025 and for 2026 to the end of April.
All but one of the top 10 performing funds in the sector over the past three years are actively managed strategies, reinforcing the case that long-term value can be added through active fund management in this particular sector.
Macro backdrop
The first four months of 2026 have been characterised by a markedly different set of drivers compared with 2025. While last year’s volatility was dominated by tariff fears and AI disruption, 2026 opened with the familiar AI theme, but with considerable geopolitical tension as an escalating conflict in the Middle East and associated disruptions to oil supply through the Strait of Hormuz dominated the first quarter. Brent crude surged to levels materially above those seen at the start of the year, fuelling global inflation concerns and prompting central banks to reassess the pace of rate cuts going forward.
Equity markets initially held up relatively well, buoyed by solid corporate earnings and an improving growth backdrop, before some de-risking emerged as energy price pressures intensified in late Q1. Equity multiples moved lower and credit spreads widened modestly. Sectors with direct commodity linkage, particularly energy names and certain defence stocks fared well.
Meanwhile, non-US markets that had outperformed strongly in 2025, such as European banks and UK equities, gave back some of those gains as inflation expectations rose, albeit the FTSE All Share ended the period ahead of the S&P 500. The US dollar rebounded somewhat, tempering the tailwinds that had benefited emerging markets and Asia through much of last year.
Notwithstanding the headline volatility, the broader earnings outlook for 2026 and 2027 has remained broadly intact. Markets appear to be treating the energy disruption as a containable event rather than a structural shift, with relief measures from international bodies and authorised oil releases providing some offset.
Investors continue to monitor US trade policy closely, particularly the trajectory of tariffs introduced in 2025, as well as the implications of this year’s US midterm elections on the legislative outlook.
How it’s performed
Year to date, to the end of April 2026 in sterling terms, IA Global Equity Income has continued to demonstrate relative resilience, in keeping with the dynamics that drove outperformance through much of 2025. Income-oriented portfolios with meaningful exposure to energy and financials, all sectors that feature prominently in higher-yielding global strategies, have benefitted from the market rotation away from growth and towards more defensive and commodity-linked holdings.
The US market, which historically yields considerably less than many of its developed and emerging market peers, continues to be underweighted across much of the sector, and this structural bias has proved broadly supportive, given the relative underperformance of US growth equities in recent months.
The UK and parts of Europe remain well represented in global income portfolios, and while both have faced headwinds from rising energy prices and renewed inflation concerns, the attractive valuations and elevated yields on offer continue to draw income-seeking investors. Financials, which had been among the strongest performers in 2025, have been more mixed in 2026, though the prospect of rates staying higher for longer in parts of Europe has provided some support.
Overall, the income characteristics inherent to the sector have once again provided a degree of ballast amid a turbulent start to the year.
Funds to watch: Assets under management
At time of writing, the Vanguard FTSE All-World High Dividend Yield Ucits ETF remains the largest fund in the IA Global Equity Income sector. Incepted in 2013, the fund seeks to track the performance of the FTSE All-World High Dividend Yield index through a representative sample of constituent securities. It offers investors low-cost, diversified exposure to dividend-paying equities across developed and emerging markets, with an OCF of 0.29% per annum. Its scale and simplicity continue to attract significant investor interest.
Guinness Global Equity Income has been managed by Dr Ian Mortimer and Matthew Page since its inception at the end of 2010, and has grown substantially to become one of the largest and most recognised funds in the sector, with strategy assets now in excess of £5.6bn. The portfolio comprises an equally weighted selection of 35 stocks. The managers’ philosophy is underpinned by a focus on companies with a persistent high return on capital and low levels of leverage. The fund managers apply a minimum yield screen of 1.5%, though typically the securities in the portfolio will yield considerably more. The consistent, disciplined application of this process has generated a strong long-term track record.
Fidelity Global Dividend has been managed by Dan Roberts since the strategy’s inception in 2012 and is now around £4bn in size. Roberts adopts a flexible, bottom-up investment approach targeting companies that deliver attractive dividend yields, supported by rising income streams and strong prospects for capital appreciation. In evaluating opportunities, particular attention is given to the durability of dividends and whether the share price offers a sufficient margin of safety. The resultant portfolio contains around 45 stocks and is diversified across regions and sectors, with a high active share relative to the broader global index.
Funds to watch: Newcomers
The UK-domiciled Oeic iteration of T. Rowe Price’s established global equity dividend strategy, T. Rowe Price Global Dividend Equity, seeks to invest primarily in the shares of companies that pay attractive dividends and/or demonstrate the potential for dividend growth, alongside capital appreciation. The strategy brings a well-resourced, globally integrated approach to dividend investing that is relatively new to the IA sector but backed by a deep institutional heritage.
Managed by Bettina Edmondston and Alasdair Birch, both of whom joined River Global Investors following the firm’s acquisition of Saracen Fund Managers in 2022, River Global RGI Global Income and Growth focuses on investing in leading global businesses offering lower risk and modest share valuations. The managers conduct proprietary research centred on businesses’ long-term earnings potential, including ‘worst-case’ scenario modelling, to build what they describe as a differentiated, high-conviction portfolio with a high active share.
Having launched on 31 March 2025 under the management of Niko de Walden and Joseff Thomas, both formerly portfolio managers at Royal London Asset Management, the aim of IFSL Pinnacle Global Equity Income is to deliver a total return in excess of the MSCI World over rolling five-year periods, with an income premium of at least 20% above the index over rolling three-year periods. The investment process is built around a corporate life cycle framework, which seeks to identify companies at stages where they have the strongest potential for wealth creation. Portfolio construction is designed so that stock selection is the primary driver of relative return, rather than region, sector or style factor exposures.
Funds to watch: 3-yr performance
Artemis Global Income has been managed by Jacob de Tusch-Lec since its launch in 2010, with James Davidson having co-managed the strategy since 2020. The manager essentially looks for companies he believes have the potential to generate high levels of free cashflow, that are attractively valued and offering a yield premium, utilising a top-down influence to identify global trends. The portfolio tends to be well diversified, with investment spread across 60-100 holdings, and will often look and behave markedly differently to sector peers. The fund’s willingness to invest across a broad range of regions and sectors, including a meaningful allocation to European and emerging market equities, has served it well in recent years as income opportunities have broadened beyond the traditional hunting grounds of US large caps.
The Thornburg Equity Income Builder fund seeks to provide an attractive and growing income stream by investing in high-quality companies worldwide with strong dividend potential. The bottom-up process leads to an unconstrained global portfolio of approximately 60 stocks which the managers believe provide the best income opportunities across the global universe. The fund has a well-established track record of navigating different market environments and continues to benefit from its flexible mandate, which enables the team to allocate across geographies and sectors without reference to index constraints.
Managed by a systematic, quantitatively driven team, Jupiter Merian Global Equity Income seeks a total return from income and capital growth by investing in equities and similar securities of companies listed globally, including in emerging markets. The fund targets companies that generate regular cashflows through dividends and have good growth prospects. Its systematic approach to portfolio construction offers a differentiated source of return within the sector, and its three-year track record has demonstrated that its model-driven process can add value across a variety of market conditions.
