Thousands of investors with global equity income exposure were short-changed last year as more than half of funds (56 per cent) slashed their payouts.
Research conducted by FundExpert.co.uk concludes that global equity income funds are failing investors. European funds are blaming their failings on the crisis in Europe, which played a major role in denting companies' enthusiasm for increasing payouts. Asian managers also point to the crisis in Europe when asked why they have failed, claiming the gloom rippled around the world, even dulling the confidence of Asian finance directors. But FundExpert.co.uk says many companies are sitting on huge piles of cash and could restore fund payments in 2013.
Newton European Higher Income (ISIN: GB00B63QPJ00) investors saw the biggest cutback as it reduced payouts by around 24 per cent. Other funds that slashed their payouts include L&G Asian Income, which saw an 18 per cent cut, Threadneedle Global Equity Income (15 per cent) and Skandia Global Equity Income (14 per cent).
Two of the offending funds are on the Investors Chronicle's Top 100 funds list - Newton Asian Income and Invesco Perpetual Global Equity Income. Thier payouts were down 0.31 per cent and 1.91 per cent, respectively.
Brian Dennehy, managing director at FundExpert.co.uk, says: "The need for income is growing sharply and too many fund managers are failing to meet the most basic need - growth in that income. Investors and advisers must be much more aggressive in sorting out the wheat from the chaff."
This disappointing performance contrasts the success of UK equity income funds over the same period, in which 89 per cent of funds increased payouts.
Poor global equity income performers of 2012
|Fund||2012 payout growth %||2011 payout growth %||Current yield %|
|Newton Asian Income||-0.31||12.61||4.36|
|Invesco Perpetual Global Equity Income||-1.91||32.29||2.94|
|L&G Asian Income||-18.81||44.44||4.1|
|Threadneedle Global Equity Income||-15.54||15.02||4.3|
|Skandia Global Equity Income||-14.86||-7.02||4.46|
|Newton European Higher Income||-24.60||26.59||4.46|
View the IC fund tips.
Visit our funds and ETFs page for fund profiles, interviews with fund managers and the latest fund news.
View our top 100 funds list.
visible-status-Standard story-url-global equity income fund faliure.xml