Tech stocks in a global income fund sounds like a contradiction, but for the £2.5bn M&G Global Dividend it is part of strategy that has paid off handsomely for investors in recent years.
Manager Stuart Rhodes has run the fund since its launch in July 2008 and has always had longevity in mind when it comes to income – focusing on a mixture of long-term dividend growers alongside short-term current yielders.
According to Rhodes, the fund’s yield sat at around 3.5% at launch, with the dividend growing by between 7-8% per year on average. In the year ending 31 March 2026, the fund’s distribution increased by around 14% to approximately 12.13p per unit, according to preliminary figures from M&G.
“It was a quite robust year, which shows we are still getting a lot of dividend progression,” Rhodes noted.
“We look to grow our dividend every year by investing in companies that are ultimately growing as businesses, growing their cashflows and, as a result, growing the dividend payment going to shareholders.”
Rather than anchoring the 40-stock portfolio in a single yield target, the fund includes a spectrum of companies that contribute to the income stream in different ways. This has led to including lower-yielding technology stocks alongside more traditional income names.
“The vast majority of [stocks in] the fund yield somewhere around 3-3.5% but we also have some companies at the higher end yielding as much as 5-6%,” Rhodes said.
The fund also includes names yielding 1-1.5% but which are growing the dividend much quicker.
“The trade-off is: are we getting either outsized dividend growth of maybe 20% to 25% from some of those lower yielders, or very consistent, reliable 10% to 12% dividend growth from other names – either means I can justify their position in the fund,” Rhodes said.
This broad approach also means the fund can hold companies not traditionally associated with income, such as tech stocks. Rhodes argued that a handful of names within the sector offer dividend growth credentials that are hard to find elsewhere.
“The more difficult years for the fund are when tech is absolutely ripping but, when that doesn’t happen and there is a big rotation, you get the opportunity to buy some,” he noted.
“2022 was the last year where we had an extended period to buy growth or technology names – we went after a few like Broadcom, which we made a 5% position in the fund at that time.”
More recent bouts of volatility – such as the US tariff-prompted sell-off in April 2025 and the outbreak of the Middle East conflict earlier this year – have been shorter, limiting the ability to build positions at scale, Rhodes said.
Two of the fund’s biggest technology positions today are Microsoft and Meta. Microsoft has been in the fund since launch and, despite sitting at the lower-yielding end of the portfolio, continues to offer steady dividend progression.
The company increased its quarterly dividend by 10% in September 2025, taking the payment to $0.91 per share, extending a long record of annual increases.
However, its weighting in the M&G portfolio has “yo-yoed” significantly depending on valuation, Rhodes said.
“Microsoft has had quite a difficult ride in the past few months given how software has been valued generally, and so we have been buying into the weakness and making it a larger position,” he said. Microsoft is currently a 6% position in the fund.
Over the past few years, however, there have been periods where Rhodes has sold the position aggressively “because we felt the company had reached the top end of what we were prepared to pay”.
Another Magnificent Seven stock is also in the fund’s top 10: Meta. The social media giant initiated its first dividend in January 2024, surprising the market.
Rhodes recalled debating whether to wait for Meta to establish a dividend track record before investing. “But I came into work on the Monday thinking that a lack of track record is not a good enough reason not to buy this name, given the valuation attractiveness and the fact that it added something completely different to the portfolio,” he said.
Meta increased its dividend by 5% in February 2025 to $0.525 per share. With a payout ratio of just 7.63%, Meta has substantial room to grow the dividend. M&G Global Dividend’s position in Meta currently sits at 3.8%.
Crucially, both Meta and Microsoft give Rhodes exposure to the AI build-out, alongside other portfolio holdings such as semiconductor manufacturer TSMC – a 4.8% position in the fund. In February, it raised its 2026 dividend by 28% to $0.73 per share.
Rhodes noted that 15 years ago M&G Global Dividend “wouldn’t have had as much in that lower-yielding tail because we didn’t have the options for outsized dividend growth that are on offer at this particular moment in time”.
“But we have always been willing to be flexible and go down the yield spectrum,” he added.
That same flexibility applies geographically, with Rhodes increasingly finding dividend opportunities in markets that offered little when the fund launched – in particular, companies in Japan and Southeast Asia.
“The options in Japan and Southeast Asia were noticeably fewer than what we had in other parts of the world when we first launched the fund,” said Rhodes.
“That has been something we have had to work on quite hard over an extended period in order to build the kind of options we would like to have, to be able to freely invest in that part of the world.”
Rhodes noted that there has been a “noticeable change” in dividend culture in Japan over the past five years, which has increased his options.
“I still think it’s got a way to go before we get the level of choice or the culture that’s embedded in regions like the US, Canada, western Europe or Australia,” he said.
“Those regions have a very well-established dividend culture, which means our choice in those parts of the world is always quite robust.”