The current cost of living crisis threatens an economic downturn and potential market volatility. During such times, equity income funds can provide stability and compensate for waiting for markets to recover.
Guinness Global Equity Income and JPM Global Equity Income boast a selection of diversified equities, heavily weighted towards the US market and popular names with reliable shareholder distributions.
Guinness Global Equity Income
Guinness Global Equity is a $2.9 billion fund launched in 2010 with a current yield of 2.61%.
The fund has beat the IA Global Equity Income benchmark consistently over the last five years, with Guinness returning 77.3% against the benchmark 43.2% five years ago, 11.9% compared to 28.1% one year ago and 10.4% against 5.7% six months ago.
Guinness Global Equity Income portfolio
Guinness invests the majority of its fund in US equities at 58.3%, with 9.5% in UK equities, 7.2% in Swiss equities, 5.3% in French equities and the remainder in a selection of international equities and cash.
Its major holdings include Johnson & Johnson at 3.1%, Pepsico with 3% and Blackrock at 3%, displaying some heavy duty investments with reliable shareholder payments.
Johnson & Johnson hiked its dividend to $1.13 in Q3 2022 compared to $1.06, and has paid a consistent dividend each quarter for the last five years.
Pepsico reported a $1.15 dividend in its past quarter, alongside a $1.5 billion share buyback scheduled for FY 2022.
Blackrock recommended a $4.88 dividend per share in the three months to 30 June 2022, hiking its shareholder payout from $4.13 the year before.
JPM Global Equity Income
JPM Global Equity Income is a £401.1 million fund, and has a slightly lower, yet still attractive, yield of 2.24%.
It similarly invests in a wide array of global equities, with over 50% of its resources invested in US companies including a selection of well-known firms under its belt.
JPM Global Equity also uses the IA Global Equity Income benchmark, and has beat that benchmark consistently over the last five years, returning 81.5% against the IA Global Equity Income at 41.9% five years ago, 13.4% compared to 6.3% one year ago and 9.9% against 6% six months ago.
JPM Global Equity Income portfolio
The fund is weighted 58.5% in US equities, 18.5% in international equities and 6.5% Japanese equities, with the remainder of its investments split across a selection of international equities and 1.5% stake in Money Market.
JPM Global Equity shares several notable investments with Guinness, including AbbVie with a 2.2% stake and Johnson & Johnson at a 2.7% holding. JPM also has notable slices in companies including Microsoft at 4.8% and UnitedHealth at 2.1%.
Microsoft announced a dividend of 62p per share for its Q4 2022 from 56c in Q4 2021, and has hiked its dividend consistently quarter-on-quarter over the last 18 years.
UnitedHealth increased its dividend to $1.65 last quarter from $1.45 year-on-year, with the company’s payout rising reliably each year for the past 30 years.
AbbVie paid a $1.41 dividend per share declared in its recent quarter, marking an increase from $1.30 year-on-year.
Comparison
Guinness Global Equity Income and JPM Global Equity Income have a selection of similar investments, and yields at a rather close level to one another.
However, JPM Global Equity has beat the same IA Global Equity benchmark at a higher rate than Guinness, and despite similar weighting in US equities and even some shared company investments, JPM Global Equity has clearly exceeded the mark at a higher level than its competition, marking it out as the more rewarding investment in a time of market volatility.
