IP Select Global Equity Income Share Portfolio (IVPG) aims to achieve a growing level of income return each year, with capital appreciation over the long term, through a concentrated but diversified portfolio of global equities.
IVPG's portfolio is relatively concentrated, comprising of approximately 52 stocks. The team, led by Nick Mustoe, look to invest in high-quality companies at attractive valuations, offering appealing yields, sustainable income and capital upside.
Over the long term, the trust has met its aim of achieving strong total returns and the emphasis on dividend growth, rather than investing for the highest achievable yield, has meant that the trust has outperformed peers. Since the team took over the portfolio in late 2012, the trust has outperformed many of its investment trust and open-ended peers by a country mile, delivering 34% and 24.1% greater returns than the Morningstar IT Global Equity Income sector and the IA Global Equity Income sector respectively.
The portfolio currently yields 3.7%, and at a portfolio level the managers expect growth in earnings and dividends at around 6-7%. Shareholders have seen substantial year-on-year increases in income payments, with full-year dividends growing at a rate of 14.5% p.a. over the past five years.
So far in FY19, three interim dividends have been announced. The latest, in December, equated to 1.5p and the Directors announced that they have a target of at least maintaining the previous year’s dividend (6.7p). The Company also employs a dividend policy which looks to smooth pay-outs through returns of capital, whilst actively controlling the discount. Historically this has prevented the trust’s shares from slipping to a significant discount to NAV and currently the discount is -2%.
