US Equity Income Fund — Dividend Growth Strategy

US Equity Income Fund — Dividend Growth Strategy: Quality Income from America's Most Durable Businesses

The S&P 500 Dividend Aristocrats are a distinct subset of the US equity market — companies that have increased their dividend every single year for at least 25 consecutive years. To sustain a growing dividend for more than a quarter century, a company must possess durable competitive advantages, pricing power, consistent cash generation, and disciplined capital allocation. These qualities are precisely what long-term income investors should seek.

This fund focuses on dividend aristocrat and dividend growth companies, targeting a 3.5–4.5% annual income yield delivered through quarterly distributions, alongside long-term capital appreciation.

The Dividend Growth Investment Case

Dividend growth investing is distinct from pure high-yield investing. The highest-yielding stocks are often companies paying out an unsustainable proportion of their earnings, or companies in declining sectors propping up their share price with income. Dividend aristocrats are the opposite: companies growing both their earnings and their dividends steadily over time.

The compounding effect of dividend reinvestment and dividend growth has historically produced superior total returns over long periods compared with both pure growth stocks and high-yield income strategies. When dividends grow faster than inflation, the investor's real income also grows over time — an important feature for long-term wealth preservation.

In 2026, dividend growth investing has an additional appeal: with equity valuations elevated in the growth and technology sectors, dividend aristocrats offer more reasonable valuations relative to their earnings power, providing a measure of downside protection in a market correction.

Fund Structure and Share Classes

The fund is structured as a UCITS-regulated collective investment scheme, available to non-US investors in three share classes:

USD share class: Undiluted USD exposure, appropriate for investors whose spending currency is or will be US dollars — including UAE-based investors benefiting from the AED/USD peg.

GBP-hedged share class: Currency risk of the underlying USD positions is hedged back to GBP, appropriate for UK-based investors or those planning to return to the UK.

EUR-hedged share class: As above but hedged to EUR, appropriate for eurozone-domiciled investors.

Currency hedging eliminates the majority of currency volatility but is not perfect — residual hedge mismatches and hedge roll costs mean hedged-class returns will differ marginally from the base USD class.

Portfolio Characteristics

The fund holds 40–60 positions drawn from the S&P 500 Dividend Aristocrats index and adjacent dividend growth companies globally. The portfolio is actively managed, with security selection based on dividend sustainability analysis, earnings growth projections, valuation metrics, and sector diversification. No single holding exceeds 5% of the portfolio.

Sector weightings tilt toward historically dividend-rich sectors — consumer staples, healthcare, utilities, financials, and industrials — while maintaining exposure to dividend growth companies in technology and communications where appropriate.

Risk Considerations

Equity market risk: This is an equity fund. Share prices of even the most quality dividend growers can fall significantly in a broad market correction. Investors must be prepared for periods of significant negative returns. The minimum recommended investment horizon is five years.

Dividend cut risk: Companies can cut dividends in periods of financial stress. The fund's focus on aristocrats with 25+ year dividend growth records reduces but does not eliminate this risk. The 2020 COVID-19 period saw a number of historically reliable dividend payers suspend dividends temporarily.

Currency risk: Investors in the USD share class bear USD currency risk. Investors in GBP or EUR hedged classes bear residual hedge risk and hedge costs.

Suitability

This fund suits investors seeking a balance of income and long-term capital growth from a well-diversified equity portfolio. The quality filter of dividend aristocrats makes it more defensive than a pure US equity index fund, while the 3.5–4.5% income yield serves investors with distribution requirements. Suitable for retail and sophisticated investors with a minimum five-year horizon.

How to Invest

Contact our investment team to confirm current yield, receive the KIID and fund prospectus for your preferred share class, and discuss the subscription process. Minimum investment is $25,000 (or currency equivalent in the hedged share classes). The fund is available through our recommended international custodian platforms.

Important: Capital is at risk. This is an equity fund and its value can fall as well as rise — investors may get back less than they invest. Dividends are not guaranteed and can be cut or suspended. The 3.5–4.5% income yield is a target, not a promise, and past performance is not a guide to future returns. This is for information purposes only and does not constitute a personal recommendation. Seek independent financial and tax advice before investing. This fund illustrates the type of US equity income opportunity Global Investments advises on — it is not a live investment offer.