The most-popular dividend shares among global fund managers

We reveal the global income stocks the pros have the most exposure to.

Over the past decade, more investors have been broadening their horizons by adding international diversification to their portfolios.

For income-seeking investors, the UK has a rich dividend heritage, but there are some drawbacks. The first is that income is highly concentrated among the biggest payers, with figures from Link Group showing the 15 biggest payers in 2022 accounted for 60% of all dividends paid by the market. Another downside is that the UK market has a bias to old-economy industries and sectors, such as miners and banks, with little exposure to tech companies.

Therefore, it is the fund managers running global equity income funds who can cast their nets wider, reflecting the less-concentrated nature of global dividends.

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It is a good idea to have some exposure to as many markets as possible to access the best companies. An easy way for income investors to ensure that most bases are covered is to opt for a global equity income fund.

We’ve separately looked under the bonnet, via Morningstar, to discover the most popular dividend-paying shares among UK fund managers, but in this article, the focus is on global equity income funds.

Data, from Morningstar to the end of October, highlights the 20 most-popular shares ranked by the sector average percentage weighting for global equity income funds. 

Consumer-facing businesses and tech firms dominate the table, with Microsoft (NASDAQ:MSFT), Cisco Systems Inc (NASDAQ:CSCO) and Procter & Gamble Co (NYSE:PG), the top three most-popular income stocks.

In fourth place is healthcare giant Roche Holding AG (SIX:ROG), which has one of the highest forecast dividend yields in the table, at 4%. Five other healthcare stocks feature: Medtronic (NYSE:MDT), Sanofi SA (EURONEXT:SAN), AbbVie Inc (NYSE:ABBV), Johnson & Johnson (NYSE:JNJ), and Novo Nordisk (NYSE:NVO). 

Overall, the dividend yields are notably lower than the 20 most-popular UK dividend shares. Tobacco firm Imperial Brands (LSE:IMB) is an outlier, with a yield of 8.6%. The next highest yielders, at 4.2% and 4.1%, are CME Group (NASDAQ:CME) and Sanofi SA (EURONEXT:SAN). The forecast yield figures were sourced from SharePad on 18 December. 

• The 20 most-popular dividend shares among UK fund managers in 2023
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How the top 20 has changed since start of 2023 

There have been two new entrants and exits in the table since the end of January, when the data was last compiled. The newcomers are Imperial Brands and Novo Nordisk, while the two that left are Emerson Electric (NYSE:EMR) and Schneider Electric (EURONEXT:SU).

As our latest ii view points out, Imperial Brands’ high cash generation continues to underpin shareholder returns.

Pharmaceutical firm Novo Nordisk is a leader in making insulin for diabetes and appetite suppressants for people controlling their weight. It has a low forecast dividend yield of 1.3%, which indicates that fund managers own the stock more for its growth potential.

James Dow, fund manager of Baillie Gifford Responsible Global Equity Income, which is one of interactive investor’s ACE 40 sustainable investment ideas, explains why it is a top holding for the fund: “Our view is there's a huge growth opportunity, a really attractive growth opportunity in sales and profits for the company as more people are diagnosed with diabetes and [more use] the appetite suppressant. So, growth is a really big part of it.”

Data from Morningstar to end of October 2023. Forecast yield figures sourced on SharePad on 18 December 2023. Past performance is not a guide to future performance.