Miners amongst M&G Global Dividend's worst performers

Stuart Rhodes, manager of the M&G Global Dividend fund, shares his best and worst-performing stocks.

The fund has ranked in the first quartile over three and five years. Over one year, the fund has returned 25.4% compared with an average of 21.1% in the Global sector as at 5 November. The M&G Global Dividend fund was the most-bought fund on Interactive Investor in August this year.

The £7.5 billion fund has been managed by Rhodes since its inception in July 2008 and aims to deliver a dividend yield above the the global equities market average by investing in a range of global equities. Top holdings in the fund include Prudential, Microsoft, Methanex, Novartis, Occidental Petroleum, Sanofi, Bank of Montreal, DSM NV and Gibson Energy.

Rhodes says the worst performers for the fund this year, particularly in July, were miners. The manager held BHP Billiton but has sold this. He says: "We were concerned about its ability to generate excess free cash from the projects it has outlined." Poor performance was also due to share-price weakness with Microsoft, Potash Corp, ALS and Orica. "We get a few things wrong each year and Potash is one example," he admits.

However, Rhodes adds "we have had several companies perform exceptionally well". Top performers for the fund have been pharmaceutical business Roche and Las Vegas Sands, a gaming company. CME Group was also a top performer and a sizeable contributor to earnings in the first half of the year, but the manager sold the stock this summer. Methanex is another top performer, which Rhodes describes as "the most cyclical name on the portfolio. We are exceptionally pleased by its progress".

On Las Vegas Sands, Rhodes says the driving story "is the sizeable business abroad, growth in Singapore and a recent dividend increase of 40%."

Rhodes says that two areas where the fund struggled to find suitable shares earlier in the year included Japan and US technology. Although he has only uncovered two or three suitable Japanese names for the fund, Rhodes has increased the fund's weighting to technology by adding, Micosoft, Xillinx, Qualcomm, KLA-Tencor and Avag. Commenting on the fund's exposure to technology, he adds: "I wouldn't be surprised if this touches the 15% mark by the end of the year."