M&G North American Dividend Fund Sterling I Acc

US Equities

New for 2019. Focuses on rising dividends

Perhaps the most impressive performance over the past year has come from M&G North American Dividend. It has a steady performance profile and a commensurately low FE risk score.

It stands out from other top performers because it is not chock-full of technology stocks – the ‘FAANGs’ (Facebook, Apple, Amazon, Netflix and Alphabet’s Google) that have driven the US market higher.

John Weavers and his deputy Stuart Rhodes have run the fund since 2015. It has a relatively modest yield of 1.7%, lower than 2% for the S&P 500 index, but the fund prioritises dividend growth – companies with the potential to pay rising dividends to shareholders over the long term.

They select stocks with different sources of dividend growth to build a fund that has the potential to cope in a variety of market conditions. More than half of the fund is in ‘mega-caps’ (those valued at more than $50 billion), but its largest overweight position relative to the S&P 500 index is medium-sized companies (valued at $2 billion to $10 billion).

The managers continue to be pleased by the dividend growth from the fund’s 45 holdings, many of which have delivered positive surprises. Tax reform is having a tangible effect on US corporate profits, allowing the likes of Union Pacific, operator of North America’s premier railroad franchise, and Altria Group, one of the world’s largest tobacco producers, to pass on the benefits to shareholders in the form of higher dividends.

However, given that the positive impact of this one-off event is now priced in they deem it important to identify the companies that can keep the benefits for the long term, because they will sustain premium dividend growth.

Narrative as of January 2019. 

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Name
M&G North American Dividend Fund Sterling I Acc
Manager
M&G Securities Ltd
Type
Open Ended Investment Company
ISIN
GB00B7565G26
Sector
North America
Launched
03/08/2012
OCF
0.7 %
Risk Rating
4
3 Year Sharpe
1.46
3 Year Alpha
2.57
Yield
0.8 %
Benchmark
S&P 500 TR EUR
The Fund aims to maximise total return (the combination of capital growth and income) whilst aiming to grow distributions over the long term.
Holding %
Microsoft Corp 6.42 %
Methanex Corp 4.69 %
Constellation Brands Inc A 4.58 %
Comcast Corp Class A 4.51 %
UnitedHealth Group Inc 3.90 %
Fidelity National Information Services Inc 3.79 %
Mondelez International Inc Class A 3.56 %
Anthem Inc 3.55 %
Broadcom Inc 3.39 %
Mastercard Inc A 3.31 %
Region %
United States 89.64 %
Canada 9.21 %
Sector %
Financial Services 22.52 %
Technology 13.34 %
Industrials 10.93 %
Healthcare 10.67 %
Consumer Defensive 9.32 %
Consumer Cyclical 8.86 %
Energy 7.84 %
Basic materials 7.28 %
Name
M&G Securities Ltd
Address
EC4R OHH, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

John Weavers
Joined 04/28/2015

John Weavers has been the fund manager of the M&G North American Dividend Fund since April 2015. In January 2016, he was appointed deputy fund manager of the M&G Global Dividend Fund before being joined by Alex Araujo as co-deputy fund manager in April 2016. John is also the deputy fund manager for the M&G Global Listed Infrastructure Fund and the M&G (Lux) Global Listed Infrastructure Fund which were launched in October 2017. Prior to April 2015, John was deputy fund manager of the M&G Pan European Dividend Fund and the M&G Dividend Fund for two years. John joined M&G as a graduate in 2007 and worked as an analyst in the Equity Research team before joining the Income team in January 2012. He graduated from Oxford University with an honours degree in politics, philosophy and economics and is a CFA charterholder.

Data provided by Morningstar.

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