BNY Mellon Global Income Class U - Income (GBP)

The fund has performed well since launch versus the IA Global Equity Income sector average. However, more recently it hasn't kept up with the broader stock market which has been largely driven by the giant US tech companies, many of which pay little or no dividends. While the process has largely remained the same, much of this performance is attributed to the fund's previous managers.

The managers believe that the best way to achieve long-term growth is through the compounding (reinvesting) of dividends over time. To harness this philosophy, they have a strict buy and sell discipline to ensure that the companies they own compound at a higher rate than the market. For a stock to be considered for the portfolio it needs to yield at least 25% more than their benchmark - the FTSE World. In contrast, should the stock's yield fall below the benchmark it must be sold.

Investing in companies with unsustainable yields can be detrimental to long-term returns and is a risk they actively manage. Their bottom-up approach helps them to avoid these by investing in quality companies which have a dominant market position, sensible balance sheet and can easily generate cash. Understanding how companies will benefit or struggle to adapt to an ever-evolving society is another key aspect of their process. The managers will also assess if these businesses are supported by thematic tailwinds like consumer power and state intervention. They model a wide range of possible scenarios and try to invest where they believe there is attractive potential returns on offer which outweigh the risks.

This whittles a universe of around 2,600 companies down to a concentrated portfolio of between 40-70 names. Currently they own around 50 which means each holding can have a significant impact on performance, which adds risk. Developed markets are a key focus with around 40% of the fund invested across North America and Europe. They also invest in higher-risk emerging markets but exposure here is mainly through the revenues of countries listed elsewhere. The fund has not had any exposure to higher-risk smaller companies in recent years, but does have the flexibility to invest in them which, if used, would add risk.