In the latest Q&A article and podcast from Fund Calibre, discover how global dividend investing has evolved in a world of shifting inflation, volatile markets and concentrated index leadership.
Stuart Rhodes, manager of the M&G Global Dividend fund, focuses on identifying companies capable of delivering sustainable dividend growth through strong cash generation, disciplined reinvestment and sensible valuations. We discuss a wide variety of topics this week, including the balance between yield and growth, geographic opportunities across global markets, the role of technology in an income portfolio and how currency movements affect returns.
Why you should listen to the interview: If you want to understand how dividend income can grow sustainably, rather than simply chasing high yields, this interview with Stuart Rhodes offers valuable insight. You’ll also get insider views on inflation protection, valuation discipline and how global opportunities can support long-term income growth.
This interview was recorded on 15 January 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
What sustainable dividend growth really means
“We really focus on that last word — growth. And that’s especially relevant for dividend investing because when many people think about dividends, they often think about businesses that are very well established, maybe have gone through “X growth” and therefore actually dividends is the only thing left for them to do. And so therefore you might get a high dividend but it’s not able to grow particularly quickly.
“This fund is kind of the opposite of that really, we’re looking for companies that still have lots of growth ahead of them. They’re just achieving that in a very sensible and disciplined fashion. So we are looking for companies that are generating enough cashflow where they can pay you a sensible dividend over time, but then they’re reinvesting the remainder to help grow the business and continue to grow their cashflow streams. So therefore you can get a bigger and bigger dividend over time.”
Balancing yield and growth in today’s market
“It’s about getting the right balance there. So, I think it’s actually changed a little bit in the history of running this fund and we’ve got more choice at either end of the spectrum there. We’ve been able to find some companies that are yielding a bit more and are in the 4% to 5% category and are still able to grow. And the kind of minimum growth rate we need is kind of 5% because we believe in most time periods, 5% dividend growth will be enough to see off inflation. And then likewise, we’ve got some businesses that are maybe only yielding 1% or 2%, but growing their dividend up at 15& and in some cases well north of 15%. So, it’s always get about getting that balance right in making sure that there is some yield to start with and then being disciplined about the growth that underpins it.”
Is technology a challenge or opportunity?
“Technology is a challenge for any kind of dividend investor in the market as it exists today, purely because of the sheer scale of the sector and what it makes up of the index. However, there are many, many options of where to invest from a dividend point of view.
“It wasn’t that long ago in 2022 where technology had a very, very difficult year. That’s the time when a dividend manager can make a real difference, if you are brave enough to go against the grain and buy when no one else wants to. And then subsequently, obviously the sector’s had a big run since then, but every now and again, you get these wobbles where you do get chances to do something about it.
“It’s kind of classic investing really is just making sure you’ve prepared yourself to buy low and sell high.”
Quality, valuation, and future income confidence
“The long term CAGR of the fund up until the last complete fiscal year was just over 7% and I’m pretty confident this year and then next year we’ll probably deliver numbers slightly superior to that. One of the major dynamics is that we have seen kind of the quality part of the market sell off quite significantly. We’ve had three kind of years compounded together where quality investing as a style has been hard work. What we’ve seen is those valuations come down, nothing’s really changed that much, but valuation expectations have just become much more reasonable. Every time we see the fund sort of gradually shift towards them, that actually makes me feel quite a bit better about what the dividend prospects at the fund level are going to be for the next couple of years.”
Conclusion: Generating reliable and growing income requires more than selecting high-yield stocks. This conversation highlights the importance of balance between yield and growth, valuation and quality, discipline and opportunity.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Main image: agustin-fernandez-T41qYnUO3IY-unsplash
