Why consider MYI?

Connaghan and Fitzpatrick follow a disciplined bottom-up stock selection process and their approach to running the portfolio is measured and risk aware. They believe that the uncertain macroeconomic backdrop will continue so MYI’s largest holdings are now around 3.0–3.5% rather than 4.5–5.0% of the portfolio.

The managers are unconstrained with regard to sector and geographic asset allocation. One of MYI’s important differentiating features is its low US allocation compared with its peers in the AIC Global Equity Income sector. The trust also has a significant below-benchmark US weighting of c 30% compared with c 50% in the MSCI ACWI High Dividend Yield Index. Against the US underweight are overweight exposures to Asia Pacific ex-Japan, Latin America and Europe. In terms of sectors, MYI is overweight telecoms against an underweight in industrial stocks.

With 21 years of consecutively higher dividends, MYI is one of just 20 funds in the AIC’s list of dividend heroes (at least a 20-year record of dividend growth). Unlike most of its peers, the trust only pays dividends out of income rather than income and capital, and has significant revenue reserves (c 1.1x the latest annual dividend), which are available to sustain its dividend record in years of lower income. MYI’s portfolio is a mix of traditional income stocks and companies with lower yields but good dividend growth prospects.

MYI: A diversified fund delivering both income and capital growth

Tracing its roots back to December 1907, MYI is one of the oldest investment trusts. Managers Connaghan and Fitzpatrick aim to achieve an above-average dividend yield, with long-term growth in dividends and capital ahead of inflation, by investing principally in global equities. The trust is broadly diversified by geography and sector, and now has a 21-year record of consecutive higher dividends.

The manager’s investment approach is based on three core beliefs:

1. Fundamental research can identify companies that are trading at a discount to their estimated intrinsic value.
2. Engagement with company managements and taking ESG and climate change considerations into account can enhance shareholder returns. Companies with robust ESG and climate change practices tend to outperform over the long term.
3. Disciplined, active management of high-conviction portfolios can deliver superior outcomes for shareholders.

As part of Aberdeen’s equity division, Connaghan and Fitzpatrick can draw on the considerable resources of a team of c 110 investment professionals, who are based in 12 cities across the globe. Analyst recommendations on every stock under coverage are quantitively measured as company insights are deemed a critical component of long-term alpha generation. Aberdeen’s reputation as a responsible, long-term investor allows the team good access to company managements. There is a proprietary research platform used by all its equity, credit and ESG teams, providing instant access to its global database.

Fundamental research is based on how a company makes money, the attractiveness and characteristics of its industry, and the strength and sustainability of its economic competitive advantage or ‘moat’, which includes an evaluation of a company’s ESG risks and opportunities. Meeting company managements is an integral part of the investment process as it deepens the understanding of individual businesses and the challenges they face.

In determining a company’s valuation, within traditional financial analysis, given MYI’s investment objective, there is a particular focus on a company’s ability to pay and grow its dividend. The managers also need to be cognisant of shorter- and longer-term business dynamics. It is important to understand which factors drive individual stock prices, how these may change and whether a company’s prospects are already being priced in by the market. All investment ideas are clearly articulated, including an assessment of how a thesis may differ from the consensus view, and the inherent risk factors. Peer reviews occur at regular meetings and on an ad-hoc basis.

Connaghan and Fitzpatrick select stocks on a bottom-up basis, prioritising the equity team’s high-conviction ideas. MYI’s portfolio is subject to Aberdeen’s rigorous risk controls, which include industry, country, currency, macroeconomic and fundamental factors. The managers are responsible for ensuring that MYI’s sector and geographic exposures are appropriate within the trust’s objectives.

FY25 highlights

Performance: NAV and share price total returns of 21.5% and 36.0% were well ahead of the benchmark’s 12.6% total return and UK RPI of 4.2%. The trust benefited from its global diversity, showing resilience during a volatile H125 and keeping pace with markets hitting new highs in H225.

Income and dividends: revenue per share of 13.9p versus 11.6p per share in FY24 (up 19.8%). Proposed final dividend of 4.6p per share (up 7.0% y-o-y) means an annual dividend of 12.4p per share (1.1x covered), which is 5.1% higher than 11.8p per share in FY24.

Revenue reserves: the reported numbers exclude MYI’s third interim and final dividend payments. Revenue reserves at the end of FY25 were £85.4m (up 15.1% compared with £74.2m at the end of FY24).

Fees: MYI’s ongoing charges in FY25 were 0.50%, which was 2bp lower than 0.52% and is one of the lowest in the AIC Global Equity Income sector.

Valuation: during FY25, MYI moved from a discount to a premium (see the Valuation section). Around 12.9m shares (c 2.1% of the share base) were bought back at a cost of c £35.1m and a weighted average discount of 7.9%, adding 0.16% to NAV.

Performance measurement

MYI has changed its comparator measure in recent years, so performance is calculated versus a blended index using the following: from 1 July 2025, the benchmark is the MSCI ACWI High Dividend Yield Index; from 28 April 2020 to 30 June 2025 the comparator index was an all-world index; and to 27 April 2020, there was a blended benchmark of 60% of a world ex-UK index and 40% of a world UK index.

Looking at MYI’s current and former comparator indices at the end of February 2026, the first thing to note is that the current benchmark had a dividend yield twice as large as the prior index. There was a significantly lower (12.5pp) allocation to US stocks in the new benchmark. In terms of IT, it made up more than a quarter of the previous index but does not even feature in the top six sectors in the new benchmark. Financial stocks were the largest weight in the current benchmark (16.3%) and were broadly in line with the prior index’s weighting (16.9%).

Current portfolio positioning

At the end of January 2026, the largest change over the prior 12 months was a 4.5pp increase in UK equities. MYI’s fixed income securities are continuing to be used as a source of funds, when appropriate, and made up just 2.5% of the portfolio at the end of January 2026, which was a 3.6pp lower weighting year-on-year. The number of portfolio holdings declined by six over the period from 62 to 56, with two more equity positions (to 51) and eight fewer fixed income positions (to 5). The trust has a minimum requirement of 45 portfolio positions.

At the end of January 2026, MYI’s top 10 positions made up 28.9% of the portfolio, which was a lower concentration compared with 31.9% 12 months earlier; five names were common to both periods. The top 10 is a mix of higher-yielding stocks and companies with lower yields but growing dividends; all portfolio companies contribute to MYI’s income. The lower weighting in the trust’s top 10 holdings is because the managers have prudently been taking some profits in technology names that have outperformed significantly. The proceeds have been redeployed in industries that have been under pressure but where the managers have confidence in their long-term prospects, such as pharmaceuticals and premium alcoholic beverages. MYI’s largest positions are considerably smaller than the maximum permitted 5% in a single security (at the time of investment).

Portfolio activity

In this section we focus on the new holdings and complete sales undertaken in H225. For information about portfolio activity in H125, please see our August 2025 update note.

Portfolio turnover in FY25 was 19% of gross assets (FY24: 13%) as the managers took advantage of market volatility. In H225, the managers switched two Singaporean financial companies, selling Oversea-Chinese Banking Corporation (OCBC) and buying DBS Group. The catalyst for the switch was the H125 decline in Hong Kong and Singapore dollar short-term interest rates. OCBC has greater exposure to floating-rate loans in Hong Kong dollars and the managers believed that consensus expectations for its net interest income and margins were too high. DBS is less interest-rate sensitive and has a more diversified earnings stream, including a stronger wealth management franchise. The TELUS position was sold as the Canadian telecom market is becoming increasingly competitive and there are concerns about the sustainability of the company’s dividend growth.

There were five other new holdings in H225, most of which are lower yielding stocks with dividend growth potential. Inditex is a Spanish fashion retailer with brands including Zara and Massimo Dutti. It has a reputation for consistency and has a hybrid sourcing model with around half of its garments made in Spain, Portugal, Morocco and Turkey, along with high‑volume basic items that are sourced from Asia, enabling a rapid response to fashion trends and reduced inventory risk. Inditex has industry-leading technology, net cash on the balance sheet and high levels of free cash flow.

Finnish manufacturer KONE is a global leader in the escalator and lift industry. The company generates very high margins and has a strong balance sheet. KONE has good momentum in its service and modernisation division, which generates around 90% of total profits (around 10% is generated by the new building solutions division). The company is benefiting from digital and AI-enabled predictive maintenance and has a long runway of high-margin service work as the industry’s installed base ages.

US-based home improvement retailer Lowe’s provides an increased exposure to the US consumer. The company should benefit from a housing cyclical upturn, supported by lower mortgage rates and a rising stock of ageing US homes. Lowe’s has been working to narrow the margin gap with Home Depot including having a greater focus on the more margin-resilient professional customer (Lowe’s has a greater exposure to the more volatile DIY market). Lowe’s acquisition of Artisan Design Group brings a greater presence in the homebuilder market, where the company had historically lacked scale.

French multinational Veolia Environnement is the global leader in water, waste and energy management. Around 60% of its revenue comes from Europe, while it has significant operations in the US and Australia. Veolia’s businesses sit at the intersection of major long‑term structural themes: rising demand for water-scarcity solutions, expansion of circular economy hazardous waste treatment, and growth in energy transition services, such as bioenergy and efficiency technologies. The company has contract renewal rates above 90%, which provides long-term business visibility.

The managers continued to reduce MYI’s fixed income exposure. In H225, the Pemex bonds (Mexico’s state-owned petroleum company) were sold with the proceeds reinvested in a new holding in one of the largest Mexican financial institutions. Grupo Financiero Banorte is highly profitable, has good-quality assets and is well capitalised.

Performance: Very strong FY25 results

MYI is the second largest of the five meaningfully sized funds in the AIC Global Equity Income sector (we have excluded a very small peer company from Exhibit 5). The trust’s NAV total returns are above average over the last one, three and five years ranking first, first and second respectively. At 18 March 2026, MYI was the only fund that was trading at a small premium. It has a competitive ongoing charge, ranking second. The trust has an average level of gearing and its dividend yield is broadly in line with the selected sector average. Unlike most of its peers, MYI only pays dividends out of income (and revenue reserves when required); it does not pay dividends out of capital.

Looking at a Morningstar analysis of the companies shown in Exhibit 5, MYI and STS Global Income & Growth Trust are classified as large-cap value, while the other three are large-cap blended funds. MYI has an above-average exposure to defensive sectors, and its weightings in cyclical and sensitive (moderate exposure to the business cycle) sectors are below average. The trust has the lowest US weighting at around 30% versus the peers, which are in a range of c 38–72%. MYI has the largest weighting of the four funds with emerging market exposure, with a notable high-single-digit Latin America allocation.

The managers are encouraged by MYI’s strong FY25 performance with +21.5% NAV and +36.0% share price total returns versus the benchmark’s +12.6% total return. With UK RPI at +4.2%, the trust delivered on its objective of generating real growth. MYI benefited from its geographic and sector diversity as the trust’s non-US holdings contributed strongly to FY25 performance. Over the period, outperformance was broadly spilt: two-thirds from asset allocation and one-third from stock selection. The portfolio showed resilience during a volatile period in H125 when US tariffs were introduced and managed to keep up with a momentum-driven period in H225 when markets rallied to new all-time highs.

In absolute terms, in FY25, MYI’s best performing geographies were Latin America (+36.0%) and Asia (+31.8%), while the worst were UK equities (+11.2%) and emerging market bonds (+14.9%), which is unsurprising during a strong equity market. The trust’s best performing sectors were utilities (44.6%), industrials (+38.5%) and basic materials (+35.3%), while healthcare (+11.3%), consumer staples (+12.4%) and real estate (+12.6%) performed the worst.

By stock, the largest positive contributors to MYI’s FY25 absolute performance were:

• TSMC (+0.7pp) - the world’s largest contract semiconductor manufacturer has been in the portfolio for more than 20 years. It posted record revenues and is seen as a major beneficiary of the growth in AI. The managers trimmed the position (along with other AI-related names).
• Singapore Telecommunications (+0.7pp) - serves more than 780m customers across 20 countries in Asia, Australia and Africa. The company delivered robust financial results, strategic capital management and continued growth in digital infrastructure, which strengthens its competitive position.
• Philip Morris International (+0.7pp) - MYI’s largest position is generating strong earnings growth and substantial free cash flow by leveraging its traditional tobacco operations to support the transition to reduced-risk and smoke-free products, which now make up c 40% of revenues. The managers have been trimming the position, recycling the cash into high-conviction names that have underperformed.

MYI’s largest FY25 performance detractors were:

• Diageo (-0.6pp) - faced macroeconomic, category-specific and operational headwinds. Demand for the company’s premium spirits was particularly weak in the US and China. The managers have added to the position as they believe the stock is undervalued.
• Pernod Ricard (-0.6pp) - experienced similar issues to Diageo with weakness in three of its core markets, US, China and Global Travel Retail. The managers also added to this position as the company has robust cost control and is proceeding with its long term €1bn efficiency programme.
• Bristol-Myers Squibb (-0.3pp) - increased generic competition and continued US regulatory and pricing uncertainty. The managers topped up this position as they have confidence in its new product line.

MYI’s relative performance is shown in Exhibit 6. As a reminder, the trust’s benchmark is a blended index. Prior
to 27 April 2000, it was a composite index (40% UK and 60% world ex-UK), then an all-country world index (100%) and, from 1 July 2025, it is the MSCI ACWI High Dividend Yield Index (100%). MYI’s NAV has outperformed its blended benchmark over the last one and five years, while its share price has outperformed over the last one, five and 10 years.

MYI’s upside/downside analysis

Exhibit 10 shows MYI’s cumulative upside and downside capture over the last decade. The trust’s defensive nature is highlighted by its less than 100% capture rates. Its upside capture rate of 88% suggests that MYI is likely to underperform by 12% in a rising market. The trust’s downside capture rate of 83% suggests that it is likely to outperform by 17% in a falling market, which reinforces the trust’s strategy, which aims to preserve capital in weak markets and to deliver a broader return for shareholders based on both income and capital, rather than just capital appreciation.

Dividends: FY25 adding another year to the record

Subject to shareholder approval of the final FY25 dividend at the 23 April 2026 AGM, MYI will have a record of 21 consecutive years of annual dividend growth. Last year, the trust become the 20th fund on the AIC’s list of dividend heroes (those with at least 20 years of consecutive dividend growth).

In FY25, MYI’s revenue per share was 13.9p, which was a 19.8% increase versus 11.6p in FY24. The proposed annual dividend of 12.4p per share is 5.1% higher year-on-year. It was 1.1x covered by income. At the end of FY25, revenue reserves stood at 13.9p per share, which is 1.1x the latest annual dividend.

Valuation: Back to a premium and issuing shares

Renewed annually, the board has the authority to issue up to 10% and repurchase up to 14.99% of MYI’s issued share capital. Aiming to reduce volatility in the trust’s valuation and make a small positive contribution to the NAV, the board repurchases shares if they trade at a persistent discount to ex-income NAV, while issuing shares if they trade at a persistent premium to cum-income NAV. During FY25, c 12.9m shares (c 2.1% of the share base) were repurchased at a weighted average discount of 7.9%, which added 0.16% to NAV.

Over the course of 2025, MYI enjoyed a meaning revaluation, moving from a c 12% discount to a c 2% premium, which has led to a resumption in share issuance. Starting in February 2026, shares have been issued from treasury at a premium to NAV. This was the first share issuance in three years.

The latest 0.4% premium compares with the 3.3%, 5.7%, 4.6% and 2.3% average discounts over the last one, three, five and 10 years respectively.

Gearing

Gearing of up to 30% of NAV is permitted (in normal market conditions). Total borrowings at the end of FY25 were unchanged year-on-year at £110m, made up of secured fixed rate sterling loan notes, which are not repayable until 2031 at the earliest. The weighted cost of debt is 2.56%. MYI’s board monitors borrowing costs and will only consider increasing the trust’s gearing when it is commercially attractive.

Fees and charges

MYI has a tiered fee structure of 0.5% of NAV up to £500m and 0.4% of NAV above this level; it is split 30:70 between the revenue and capital accounts respectively. In FY25, the trust’s ongoing charge was 0.50%, which was 2bp lower than 0.52% in FY24, and is the second lowest in the AIC Global Equity Income sector.

Capital structure

MYI is a conventional investment trust with one class of share. There are 591.8m ordinary shares in issue, with a further 55.3m shares held in treasury. The average daily trading volume over the last 12 months was c 840k shares.

The board

On 24 April 2025, MYI’s board announced the appointment of Jeroen Huysinga as an independent non-executive director, with effect from 1 May 2025. He has a more than 20-year background in global equities and investment trust management, having been managing director global equities at JPMorgan Asset Management until his retirement in 2020. Huysinga is a director of European Opportunities Trust, a charity trustee including at The Invesco Cares Foundation, Brain and Spine Foundation and John Hodges Trust, and is senior development manager at the social investment platform Ethex.