Global Dividend Fund?

Kaspa

Can someone here recommend a mutual fund primarily investing in global dividend-paying
companies making 'real' products, while avoiding the financial ones? Most of my buy-and-hold
money is invested in balanced funds (Oakmark, FPA Crescent) and a smaller amount in riskier
plays (Fairholme, Oakmark global, Matthews funds). This fund will provide another leg to my portfolio.
Thanks for your thoughts and recommendations.

catch22

Howdy Kaspa,

Good to see you here, too.

Not identical to your request; but a question I had from last week. Being related to the large cap area and some dividends here and there. A quick peek through the thread will give you the tickers of some of the funds noted.
http://www.mutualfundobserver.com/discuss/index.php?p=/discussion/797/catchs-current-ultimate-quest-for-the-funds...../p1

Take care,
Catch

[Deleted User]

Hi Kaspa, Skeeter here:

One of my global dividend funds that has a history of raising its dividend to its shareholders is TIBAX, Thornburg Investment Income Builder. The ticker listed is for the A shares; however, there are other share classes available.

Good Investing,
Skeeter

MikeM2

American Funds CWGFX. It has a load.
Don't recall its exposure to financials but it may be significant. Sister fund CAIBX usually has 25% ish in fixed income.

David_Snowball

Hi, Kaspa.

You might consider Alpine Global Infrastructure (AIFRX) or T. Rowe Price Global Infrastructure (TRGFX). It's a fascinating investment theme: build long-lasting objects and then collect rent from them forever. Pipelines, dams, roads, water treatment plants, phone systems, wind farms . . . Huge growth, major currency diversification and near zero exposure to financials. I'm not yet clear on the yield: M* says Alpine has a 5% yield but a 3% dividend yield (with no bonds) and Price has 1.2% yield but a 3.6% dividend yield.

I've been reading about (and trying to write about) the Price fund, and I'll have a profile of it - and its sector - for August. I'm not yet sold on either fund but the sector is interesting and the no-load options are few.

For what it's worth,

David

kevindow

Hi Kaspa,

The best fund out there for your needs is the institutional class of the Thornburg Investment Income Builder (TIBIX). This class is available for reasonable minimums in retirement accounts at Fidelity ($2K minimum, $75 initial TF), Wellstrade ($50 minimum, NTF if you qualify for 100 free trades/yr. by having $25K invested with them), and Thinkorswim ($2K or less, 3 free trades/month until TDA completely gobbles them up).

Other high-yielding global funds to consider, with more fixed income exposure, would be JNBSX and PGDIX, which are available at certain brokers for reasonable minimums.

Kevin

Investor

Reply to @David_Snowball:

David, I'm skeptical. Although these are interesting, I would be cautious of new unproven investments. This sort of investments bring my mind the Canal build-up and bust in England and Railroad build-up and subsequent bankruptcies in USA. A more recent example is Motorola's investment in Iridium satellite phone project. Motorola has lost huge amount of money in this project. It became profitable only after the original Iridium company gone bankrupt and some enterprising group got the assets pennies on the dollar. Then they made money on it but not the original investors.

I would not invest in funds that are going to undertake huge amount of capital investment with little guarantee of return on the capital. I think MLP and Utility investments and REITs are sufficient for income investors and for the bonds side, municipal bonds are issued for this sort of infrastructure developments.

scott

I'd suggest looking at Brookfield Infrastructure (BIP), which is a very interesting collection of global infrastructure assets, and pays about a 4.7% or so yield. While things can always change, do your own research, etc etc, it is trading at less than 1x book, and Brookfield does have quality management (Brookfield Asset Management is the parent company.)

Kenster1_GlobalValue

In addition - there is also the Tweedy Browne Worldwide High Dividend Yield Value Fund.

On the ETF side there's also the Global X Super Divident ETF (SDIV) which appears the yield will be around the 7-8% range and it does hold REITs as well. One thing that makes this fund interesting is that it equal weights 100 stocks and rebalances quarterly.

Here's the Fund Brochure for TIBIX - Thornburg Investment Income Builder fund:

http://www.thornburginvestments.com/literature/fund_literature/TH1731_DividendStory.pdf

[Deleted User]

Kaspa, I own both TIBIX and TBHDX and pleased with both as well as the management.
I would never own a fund from Alpine as I have no respect for the management.

Kaspa

Thanks everyone. All of you have given me great ideas to research.

My initial impressions, subject to change after further digging.
TIBIX, CWGFX and some others mentioned -- Substantial exposure to financials,
which I am trying to avoid. I have FAIRX for that
AIFRX and TRGFX look interesting, but don't have enough history to justify a long-term position. Any insight into the management? I know Price tends to be pretty solid in general.
BIP -- looks a bit narrow.

Kenster1_GlobalValue

Check the holdings and sector information here for TIBIX:
http://thornburginvestments.com/funds/inc_builder/inc_builder_hlt.asp

[Deleted User]

The user and all related content has been deleted.

David_Snowball

Reply to @Kaspa: The Alpine funds tend to follow a "dividend capture" discipline, so expect high yield, high turnover. It's run by the firm's founder and CEO, Sam Lieber. The Price fund is likely to be lower turnover, large value. The manager, Susanta Mazumdar, is a forty-something Indian with petrochemical engineering training. Named one of Indian's top equity analysts in the mid-2000s. He's domiciled in Singapore and something of an energy specialist.

For what it's worth,

David

BobC

I would agree with the suggestion of Thornburg Income Builder. We have owned it since shortly after it began operations. Quality management, ethical firm, and strong adherance to strategy.

fundalarm

Reply to @David_Snowball: we've had an infrastructure fund for several years now... quite illiquid, hard to value (you're investing in operating companies), PE-like investment with not so impressive returns. i would NOT suggest one. capital losses could wipe out any yield advantage.

fundalarm

JPMorgan Income Builder?

BobC

JP Morgan is almost 50% bonds, which is neither bad nor good. But it may not meet the test as a global stock dividend fund. Current allocation is about 50% bonds, 28% foreign stocks, less than 20% U.S. stocks. It's a different twist, and of course M* puts it in the "conservative allocation" category, which is no help either. That puts it in the same category as PRPFX, and they are completely different in terms of strategy. I suspect we will continue to see more of this kind of offering.

Kenster1_GlobalValue

M* News...

Manager Resigns From Thornburg
Cliff Remily has resigned as comanager of Thornburg Investment Income Builder (TIBAX). He had been at the fund for a year and a half. Brian McMahon, who joined the firm in 1984 and is its chief executive, remains in charge of stock selection.

00BY

U.S. Global Investors Global MegaTrends MEGAX

Low yield, high expenses, average return. But it may fit the theme you are looking for.

Kaspa

Started looking at two new ETFs, DTN and DOO (Wisdom Tree international and US). Both are based on indices excluding financials. The volume is quite low though.

BobC

MEGAX or MEGIX is a fund that you must completely ignore the history prior to 2008. It was re-constituted in the prior year, with all-new management, as well as a new investment strategy of global infrastructure, with an hefty emphasis on non-U.S. stocks. This is a situation where historical data is of no help at all. And M* has forced it into their "world stock" category, which is of absolutely no help (actually a hindrance) at all. The theme is compelling. The team managing the fund is a very smart bunch. We have some dollars in MEGIX and hope that like EUROX, this fund will have its day in the sun. So far, non of the global infrastructure funds have done anything great. We have had better success with PYZ, which is not a specific infrastructure investment. We have also looked at PXR, but it has not done as well as MEGIX this year. I suggest this global infrastructure idea is one to stick your toe in, but not plan on taking a whole bath. Too much volatility so far. And the fact that so many of them have different benchmarks speaks volumes in terms of the infancy of this strategy. Others in this sector that have some interest are MGU, TOLIX, and TYG (an energy play).

Kaspa

Thanks Bob. My interest is in a global dividend fund (with minimal financials). Global infrastructure is a little too narrow for buy-and-hold. My thinking started with companies like Intel, Novartis, Exxon-Mobil, Energy plays (like Petrochina, Petrobras), Altria, MacDonald's, Telecom players in emerging markets (e.g, Telkom Indonesia), Kimberly-Clark, etc. I can buy individual stocks, but it is too much work.

Investor

Reply to @Kaspa: Take a look at VDIGX and VDAIX. Both of them have much lower Financials exposure than similar funds.