Think of this as the continuing soap opera that chronicles the transformation of the Bearbull Income Portfolio, an ageing income portfolio whose long-term performance is better than its past five years. To address this, the fund must shift its outlook from UK-focused to truly international. The first steps have been taken with a capital injection and the acquisition of funds covering Europe and Asia. Now for North America, the world’s most important equity markets.
For starters – and partly because it side-steps the bother of selecting individual stocks – there is much to be said for an exchange-traded fund (ETF) from US asset manager State Street, S&P US Dividend Aristocrats (USDV). This tracks an index of 121 US-listed companies that have earned the ‘aristocrats’ epithet by increasing their dividends every year for at least the past 20. Its performance since its inception in October 2011 is shown in the chart. With dividend income reinvested – although the fund actually distributes dividends on a quarterly basis – the chart line equates to returns of almost spot on 10 per cent year. As shown – and predictably – that can’t match the 13.4 per cent technology-boosted annual return produced by the S&P 500. But it leaves standing the 6.8 per cent total return rate made by London’s FTSE All-Share index.
