Investing
Global Equity Enhanced Income Fund
An innovative and dynamic approach designed to deliver a high level of consistent income and capital growth, now with a three-year track record.
Delivering an equity income portfolio can often result in a tug-of-war between income, capital growth and a balanced portfolio. The Allspring Global Equity Enhanced Income Fund has been designed to overcome this challenge.
What: A fund designed to deliver a high, consistent income plus access to the growth potential of global equities
01.
Enhanced Income
Targets a high, consistent yield — 6% p.a. (paid quarterly)*
02.
Growth potential
Designed to capture the long-term growth potential of global equities
03.
Balanced exposures
Helps mitigate style swings while capturing growth opportunities with a globally diversified portfolio
*As of 30 September 2024. The figure is based on Class I (USD) Distributing share class.
A target is indicative only, not guaranteed and does not take into account fees or charges which will reduce returns.
A diversified approach to income delivery
Diversified sources of returns are dynamically managed to deliver the targeted income while generating robust total returns for investors.
1The fund intends to make consistent quarterly income distributions. Capital gains from both equity and option portfolios can be utilized in addition to equity dividends to achieve the target distribution. 2Only partial potential upside is given up in order to preserve long term capital growth.
One portfolio, two uses
Why: Global equities provide a broad opportunity set for income seeking investors while delivering robust capital growth in excess of inflation
01.
Global opportunity set
Avoid concentration risk with a diversified portfolio
02.
Long-term capital growth
Income investors also need to grow their assets
03.
Robust real returns
Help overcome the impact of inflation
How: An innovative and dynamic approach to delivering income
High, consistent income
- Two sources are dynamically managed.
- Balance the trade-off between income and equity returns.
Captures equity growth
- Our proprietary ‘Quantamental’ investment process combines the best of quantitative tools and fundamental analysis.
- High conviction portfolio of 60 to 80 stocks.
Balanced portfolio
- Portfolio constructed to avoid common style biases and structural underweights.
- Complements other income generating approaches.
Who: Meeting investors’ specific needs
The systematic edge team is a global quantitative capability that offers a broad range of investment products and solutions designed to help meet clients’ goals.
Built on award-winning research, the Systematic Edge team provides clients with specialist insights that are combined with cutting-edge portfolio construction techniques to provide targeted outcomes.
1 Allspring does not provide investment research; awards for research are for papers published by a third party and authored by Allspring investment professionals. They are not a guarantee of future performance at Allspring.
PM perspective
PM Perspective: Global Equity Income
Wai Lee, senior portfolio manager for the Multi-Asset Solutions team, discusses global equity market performance in 2024, the outlook for equity income, and positioning into 2025 and beyond.
Transcript
Wai Lee: For capital growth, first and foremost is the ACWI market factor, up 16.5% at the end of October. The best performing U.S. region was up 21% with 5% contribution from Nvidia alone and more than 9% from Big 6 Tech. The market leadership did open up a bit in Q3 with only two of the Big 6 Tech stocks making it to the top 20 performing stocks, year to date. But in historical context, since the 1990s, all net wealth creation in the U.S. and non-U.S. stock markets came from roughly 2% top-performing stocks. So, diversified portfolios actually got a better chance not to miss the best performers in the right tail. Then, along the style axis, growth outperformed as Leading Economic Indicator recorded consecutive months of decline. while Momentum, Large Cap, and Leverage factors also outperformed. On income, dividends, which accounted for one third of the total stock returns in the longer term, contributed less than 2% to the year-to-date return. While they deliver higher income, it has been challenging for many to match the capital growth of the market index. The MSCI ACWI High Dividend Yield Index returned 11.6%, trailing the ACWI by 5%, but there are some exceptional performers out there. We always take a total portfolio approach to put income and capital growth together in a risk-balanced manner. We draw dividends from most of our diversified holdings with profitability screens and news sentiment analysis through Natural Language Processing to help mitigate the risk of dividend cuts. We continue to collect premium by writing index call options. And with recent strong market returns, we think the upside given up is likely limited. To grow capital, we don't exclude the Big 6 Tech just because they don't pay or they pay little dividends. But unlike the High Dividend Yield Index, which is anti-Momentum, we like stocks that show momentum and sentiment to back up the attractive valuations, quality, and profitability. We don't time the market and keep the market beta close to 1. Having said that, monetary easing has been a tailwind to grow both income and capital. We think slowing or soft-lending global economy can push investors further to reward higher-quality, profitable but inexpensive stocks. So, in summary, we feel good entering 2025 in achieving 6% yield with growth potential.
Learn more about the fund:
Visit the fund page for performance, deeper investment details, and fund documents.
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Fund risks
Market risk: securities may decline in value due to factors affecting securities markets generally, and equity securities generally have greater price volatility than debt securities. Smaller-company securities risk: securities of companies with smaller market capitalisations tend to be more volatile and less liquid than securities of larger companies. Geographic concentration risk: investments concentrated in specific geographic regions and markets may be subject to greater volatility due to economic downturns and other factors affecting the specific geographic regions. Global investment risk: securities of certain jurisdictions may experience more rapid and extreme changes in value and may be affected by uncertainties such as international political developments, currency fluctuations and other developments in the laws and regulations of countries in which an investment may be made. Derivatives risk: the use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. The use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. ESG risk: applying an ESG screen for security selection may result in lost opportunity in a security or industry resulting in possible underperformance relative to peers. ESG screens are dependent on third-party data and errors in the data may result in the incorrect inclusion or exclusion of a security.