Why Future Generation Global shares are a retiree’s dream for FY27

Future Generation Global Ltd (ASX: FGG) shares look like they could be one of the top picks for retirees in FY27 and beyond.

The business is a listed investment company (LIC), which means it invests in other assets and shares on behalf of shareholders.

I’m going to run through what makes it such an attractive pick right now.

Excellent diversification

The business is invested in 15 different global fund managers, including Antipodes, Yarra Capital Management, Muncro, Halowesko Partners, Vinva, WCM, Cooper Investors, Life Cycl, GCQ, Ellerston Capital, Paradice, Fairlight and Morphic.

By being invested in so many fund managers, Future Generation Global is providing significant diversification. For starters it gives access to multiple investment styles, including ‘long’, ‘absolute bias’ and ‘quantitative’.

Those portfolios give more exposure to medium-sized global businesses and a lot more exposure to small companies.

I also like how the Future Generation Global portfolio gives global exposure across multiple markets including North America, the UK, Europe, Asia, other developed markets and emerging markets.

I think this is a really effective pick for retirees partially because of the huge amount of diversification that it can provide our portfolios with, which retiree portfolios may not otherwise have.

But, as a pleasing bonus, Future Generation Global gives diversification and a strong level of passive income.

As a bonus, it’s supporting a number of organisations include BackTrack, Big Hart, Prevention United, Project Rockit, Reach Out, Smiling Mind, Human Nature, I Can, Westerman Jilya Institute, Live 4 Life and WANTA Aboriginal Corporation.

Great dividends

There are not many businesses on the ASX that have increased their payout every year for the past eight years in a row.

There are plenty of ASX blue-chips that have cut their dividends this decade, whether that’s BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW), Woodside Energy Group Ltd (ASX: WDS) or Fortescue Ltd (ASX: FMG).

Future Generation Global has given investors steady growth in the dividend, which makes it an appealing choice for passive income for retirees.

The business has provided guidance that it will grow its FY26 annual dividend by 5% compared to the FY25 payout.

At the time of writing, an annual payout of 8.4 cents per share translates into a dividend yield of 5.1% excluding franking credits and 7.3% including franking credits.

When you put all those elements together, I think they can create a strong mix of positives for retiree portfolios, including the appealing philanthropy.

The post Why Future Generation Global shares are a retiree’s dream for FY27 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.