Fidelity Global Dividend Fund - Power of Performance

Fidelity Global Dividend Fund

September 2012

Gary Monaghan, Investment Director

WHO?

WHY?

WHERE?

WHEN?

HOW?

WHAT?

2

Why is equity income important? Dividends are the principal component of total return

1,000 100

Real total return including dividends End value US$851

+6.3% pa

Real capital return

excluding dividends

10

End value US$8.50

+1.9% pa

1

0 1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

Rule of 72

US$

The power of compounding

Source: Elroy Dimson, Paul Marsh and Mike Staunton, Triumph of the Optimists: 101 years of Global Investment Returns, Princeton University Press 2002, Credit Suisse Global Investment Returns Sourcebook 2011

3

Why is equity income important? Sustainable dividend growth is rewarded

180%

Dividend Aristocrats

160%

140%

120%

100%

80%

60%

40%

20%

0% Total Return Price Return

Volatility

180%

MSCI AC World

160%

140%

120%

100%

80%

60%

40%

20%

0% Total Return Price Return Volatility

A powerful tailwind for the income investor

Source: Citigroup as at 30 June 2012 in USD. The universe is divided into Dividend Aristocrats which are companies that have been able to grow their dividends over 10-years and the total and price cumulative returns and volatility of returns of that basket of companies. This is compared to the broader MSCI AC World universe where the same figures are calculated.

4

Who should consider an equity income portfolio? Anyone who considers income a core component of returns

10 %

8

Shaded areas = current yields Pre-Crisis: 30/06/2007

6

4

2

0

$ Cash 1 mth Cash 1 mth ? Cash 1 mth ? Cash 1 mth US 10Y Government Euro 10Y Government UK 10Y Government

Japan 10Y Government US Corporate Bonds Euro Corporate Bonds UK Corporate Bonds Japan Corporate Bonds

US HY European HY

Asian HY Emerging Market

Bonds US Equities European Equities UK Equities Japan Equities

Cash

Government Bonds

Investment Grade Credit

High Yield EM Debt

Central banks are forcing you up the risk spectrum

Source: Datastream, BofA Merrill Lynch Bond Indices - Redemption Yields, MSCI Equity Indices ? Dividend Yields (to 30 April 2012).

5

Equities

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