The Power of Three: Global Equity Enhanced Income
Sophie Scott, head of International Portfolio Specialists, breaks down the three strategic pillars behind the Allspring Global Equity Enhanced Income (GEEI) Fund and how they work together to deliver a powerful equity income solution.
Transcript
Sophie Scott: Just as working individuals rely on a regular income, those investing in income-generating strategies deserve an income they can count on. By leveraging dividends from equities and premiums from selling options, our approach seeks to provide a 6% per annum distribution yield paid in equal monthly installments. While the capital value of the equity will vary by having a smooth and targeted yield, this will improve the reliability of the income we deliver to investors, giving investors one less thing to worry about.
Income investing and capital growth doesn't always go hand in hand. While income stocks can provide a reliable and steady income, their relatively stable capital growth can sometimes result in potentially muted total returns. While most equity income portfolios require a dividend from every stock, we're able to invest up to 10% of the portfolio in non-dividend-paying securities, allowing us the potential to identify attractive growth stock opportunities. Combining this with targeting a beta of one to the broad global equity markets, we believe it's possible for investors to achieve income and growth in one portfolio.
Certain sectors and regions can often pay a higher dividend—think utilities versus technology or the UK versus the US. Left unchecked and focusing solely on generating a high yield can potentially result in an unbalanced portfolio subject to style risk, concentration risk, and potentially missing out on growth stock opportunities. Now, our approach is intentionally designed to overcome these risks. We tightly manage our sector and region exposures and explicitly target a balanced factor profile. We believe actively balancing each of these dimensions in our approach enables us to deliver income and capital growth in a well-balanced portfolio.
Authors
-
Sophie Scott, CFA
2/4/2026
Topic
Equities
Key takeaways
- Income: GEEI targets 6% per annum distribution yield (paid monthly)*, by leveraging dividends from equities and premiums from selling options.
- Capital Growth: Captures upside by investing up to 10% of the portfolio in non-dividend payers and targeting a beta of 1 to global equity markets.
- Balance: Carefully managed sector and regional exposures mean that GEEI can target a balanced factor profile.
*A target is indicative only, not guaranteed and does not take into account fees or charges which will reduce returns.
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