Investment fund M&G Global Dividend was launched more than 17 years ago as a result of the enthusiasm for overseas income stocks shown by one of the company’s rising investment managers, Stuart Rhodes.

Working at the time on M&G’s US investment desk, 27-year-old Rhodes couldn’t understand why dividend-friendly American companies were off the radar of most UK income investors.

For six months he argued for the launch of a global equity income fund, and in July 2008 got his way as he was asked to head up M&G Global Dividend.

Today, the fund – with Rhodes still in charge – has assets approaching £2.5billion and has built an enviable record.

Over the past ten years it has delivered a total return of 233 per cent. To put this into perspective, the average global equity income fund has registered an equivalent return of 153 per cent.

Yet it’s the fund’s income record which is more remarkable.

Since launch, it has increased its income payments to investors every year – and is on course to do so again when the final two quarterly payments for the current financial year (to the end of March) are paid.

Unlike stock market listed income investment trusts, funds such as M&G Global Dividend do not have the ability to smooth out income payments to investors by squirrelling away some of the incoming dividends in reserves to use at a later date.

Instead, they must hand over the income they receive from their investments in a prompt fashion.

This makes Rhodes’ ability to keep growing the fund’s income so impressive.

‘It was touch and go in the financial year to the end of March 2021, when swathes of the global economy went into lockdown,’ he says. 

‘But we managed to tickle up the dividend payment by 1 per cent.’

Since launch, annual income has risen from 3.56p a share to 10.64p in the year to March 30, 2025, with the average annual increase working out at 7 per cent. The fund’s share price sits at £6.69.

Rhodes, now assisted by Kathryn Leonard and John Weavers, says the emphasis is on income growth, not on obtaining a high level of income (the fund’s dividend yield is a modest 2.3 per cent). 

The team will also not make investment decisions that compromise the fund’s capital, which Rhodes describes as its ‘engine’.

Some 240 companies occupy the universe from which suitable investments are selected. 

Currently it has 41 holdings, including two of the Magnificent Seven – Microsoft, which has been in the portfolio from day one, and Meta, which was bought early last year. Both pay dividends.

For companies to make it into the fund, they must be paying shareholders a dividend. If they stop doing this, Rhodes will remove them at a time when it best suits the fund.

Although US stocks account for just over half of the fund’s assets, there is a sprinkling of holdings from across the globe: the UK (Imperial Brands and fund management group Aberdeen Investments) through to Japan.

Indeed, Rhodes says Japanese companies have made great strides in recent years to become more shareholder friendly and pay them dividends.

‘It’s a standout country, from a dividend point of view,’ he says.

Its only current Japanese holding is the pharmaceutical company Takeda.

Rhodes adds he has no intention of handing over the fund’s reins. ‘I don’t want to get off the treadmill,’ he says. ‘I’ve got a unique opportunity to build something special.’

Annual fund charges total 1.06 per cent.