The Guinness Global Equity Income Fund is designed to provide investors with global exposure to dividend paying companies. The Fund is managed for income and capital growth and invests in companies that are well placed to be able to pay a sustainable dividend into the future.

We focus on profitable companies that have generated persistently high return on capital over the last decade. With these criteria as our starting point we identify many well-known blue-chip companies, but we also find a broad spectrum of smaller companies that are outside of the traditional dividend-paying regions and sectors. It is a rare achievement for a company to meet our investment criteria and we think it shows a mark of genuine quality.

We maintain a high conviction portfolio of around 35 equally-weighted stocks, with low turnover and no benchmark-driven constraints on sector and regional weightings.

Awards & Ratings
LIPPER_FA_AWARD_HOR_SWITZERLAND Guinness Global Equity Income Fund
BEST FUND OVER 3 YEARS
Equity Sector Global Income
LIPPER_FA_AWARD_HOR_SWITZERLAND Guinness Global Equity Income Fund
Elite Rated
Fund Calibre

Why invest in the Guinness Global Equity Income Fund?

The Fund is designed to provide investors with exposure to global equities through a high conviction, low turnover portfolio of consistently profitable dividend-paying companies.

Focus on consistent high return on capital
Consistent high return on capital is a good indication of a company’s ability to pay healthy dividends. The Fund invests in companies that are unusually consistent in generating returns on capital above their cost of capital.
Growth and income
Our approach to dividend investing is to focus on companies that can sustainably grow their dividend into the future, rather than simply looking for companies with a high dividend yield.
High conviction
The Fund typically invests in just 35 companies, with each company having an equal weighting. This provides a good balance between the benefits of diversification while also allowing each company to add meaningfully to performance. We don’t have a long tail of small positions and by definition we can never just ‘hug’ the benchmark index.
Fundamentally driven
We focus on ‘bottom-up’ stock selection rather than trying to make decisions based on an expected outlook for the world economy. We like to invest in good companies that have, in the short term, fallen out of favour, but that have previously shown an ability to weather most economic environments over time.
Low turnover
We prefer to invest over the long term. We also recognise the increased costs of trading in and out of companies unnecessarily. Typically we will hold a company in the portfolio for between 3 and 4 years.
Repeatable and independent
Ian Mortimer and Matthew Page have managed the Fund since launch. They have developed an investment process that is clear, robust, transparent, and scalable. Their approach filters out much of the noise and hype that surrounds companies to focus on the true signals that drive company valuations. By performing their own company research and analysis, using their own proprietary modelling systems, the managers try to avoid some of the behavioural biases associated with being unduly influenced by market sentiment.

The case for a global equity income fund

"Dividends make a gradual but potent contribution to long-term returns."

Dividend growers have outperformed for 30 years

Efficient use of cash is paramount in creating a well-run, profitable company that will thrive. Management discipline is required to maintain dividend growth and can be a signal of a well-run company. Using the example of the US stock market, the evidence for this is clear in the returns of dividend paying and non-dividend paying companies over the last forty years. It is also informative to note that companies that cut their dividend were the worst performing group over this period –illustrating that not all dividend-paying companies are created equal.

Power of compounding

For investors, reinvesting dividends delivers a significant proportion of your total return. And in periods of low growth this can be even more striking. The 1940s and 1970s, for example, were periods defined by some combination of sluggish economic growth, rising inflation, and high unemployment. During these decades dividends accounted for over 75% of the total returns of the S&P500.

Average Annual Total Return of rising and falling dividend stocks in the US

Dividends can protect against inflation

Looking again at the US as an example, dividends in the US stock market have grown at an average 6% per year since the 1940s, while inflation grew at 4%. Investing in dividend-paying companies can protect against inflation over long periods: the income received in dividend payments has grown in line or at a higher rate than inflation.

Global diversity

The array of stocks around the world paying dividends has increased significantly in the last decade. We can now invest in a basket of dividend-paying companies that gives you genuine global diversity and exposure to a healthy range of industries in your portfolio. In contrast, just six companies now account for over 40% of all dividend payments in the UK.

Fund managers

Dr Ian Mortimer, CFA

Ian joined Guinness Asset Management in 2006, and is portfolio manager on the Guinness Global Equity Income Fund, Guinness Global Innovators Fund and the Guinness European Equity Income Fund.

Prior to joining Guinness, Ian completed a D.Phil. in experimental physics at Christ Church, University of Oxford, and graduated in 2006. Ian graduated from University College London with a First Class Honours Master’s degree in Physics in 2003. He is a CFA Charterholder.

Matthew Page, CFA

Matthew joined Guinness Asset Management in 2005, and is portfolio manager on the Guinness Global Equity Income Fund, Guinness Global Innovators Fund and the Guinness European Equity Income Fund.

Prior to joining Guinness, Matthew joined Goldman Sachs on the graduate scheme in 2004 working in Foreign Exchange and Fixed Income. Matthew graduated from New College, University of Oxford, with a Master’s Degree in Physics. He is a CFA Charterholder.

How do we run the Fund?

“We don’t chase yield, we want capital and dividend growth.”

Although the Fund is designed to invest in dividend-paying companies, our starting point in selecting our investment universe is to identify companies with consistently high return on capital. Specifically we look at companies that have a return on capital of greater than 10% in each of the previous ten years.

Our analysis shows that companies with persistently high return on capital are highly likely to continue to do so in the future – meaning they will continue to create shareholder value.

Why 10% and why ten years?
10% return on capital… 10% is well above the average real cost of capital of 6%. This means companies who achieve this level are truly creating value for their shareholders.
…every year… Consistency each year excludes highly cyclical companies or those with high but declining or volatile earnings.
…for ten years Because business cycles tend to last less than ten years, the companies in our investible universe have shown they can weather most economic environments.
“It's a rare achievement for a company to meet our investment criteria and we think it shows a mark of genuine quality. And this is where our portfolio starts – consistent high return on capital.”

On average, only 3% of global listed companies achieve our threshold. We then exclude those less than $1 billion in size or with a debt to equity ratio greater than 1. This gives us a pool of around 400 companies from which to build our portfolio.

What about yield?

Companies that earn a consistent high return on capital often distribute a proportion of cash they create in the form of a dividend. In the Fund, however, we focus on those companies that can sustainably grow their dividend into the future.

From this pool we then select candidates for extended research on the basis of value and sentiment. In depth proprietary modelling of a company’s cash flow, capital budgeting and potential for dividend growth is combined with a subjective analysis of its business model to identify candidates for inclusion in the final portfolio.

By selecting companies from a broad range of industries, countries, and market capitalisation we aim to create a well-diversified portfolio which can provide a reasonable dividend yield and growing income stream at an attractive valuation relative to the broad market.

Sell discipline

It is often easier to find companies to buy that look cheap than it is to identify those companies you own which should be sold. We consider sell discipline as important as selecting companies for purchase and continuously monitor the companies we hold in the Fund. The six core reasons we may sell a company are outlined below.

  1. The company fails to continue to meet our return on capital criteria
  2. The valuation becomes too rich
  3. The balance sheet becomes stretched
  4. The dividend outlook or management policy to dividends changes unfavourably
  5. The original investment thesis no longer holds
  6. Yield contribution to the portfolio is insufficient

How do we construct the portfolio

The Guinness Global Equity Income Fund is a concentrated portfolio of around 35 equally weighted stocks. This provides a number of useful attributes:

  1. It reduces stock-specific risk, as we will not be overweight in a small number of favourite companies.
  2. We will not have a long tail of small holdings in the portfolio, which can be a distraction and a potential drag on performance.
  3. It instills a strong sell discipline as we must typically sell a position in order to make way for a new one; and we must constantly assess the companies we own in the portfolio in comparison to the rest of the universe available to us.
  4. We are truly index independent. All companies held are weighted equally without regard to their weighting in the benchmark index leading the portfolio to have a high active weight.
Fund Global Equity Income Fund Date (period end) 30.11.2017
Index MSCI World Index Fund Launch 31.12.2010
Sector IMA Global Equity Income Basis Total return, in GBP

Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency movement, and you may not get back the amount originally invested.

Cumulative performance (%)
X class (1) (OCF: 1.24%) Year-to-date 1 year 3 years 5 years From launch
Fund 7.17 9.41 35.05 89.62 106.91
Index 10.81 14.77 49.02 112.23 125.14
Sector (2) 8.89 12.82 34.22 75.76 88.08
Annualised performance (%)
X class (1) (OCF: 1.24%) 1 year 3 years 5 years 10 years From launch
Fund 9.41 10.52 13.65 0.00 11.08
Index 14.77 14.21 16.23 9.84 12.44
Sector (2) 12.82 10.30 11.93 7.65 9.56
Calendar year performance (%)
X class (1) (OCF: 1.24%) 2012 2013 2014 2015 2016
Fund 5.46 26.34 10.10 1.99 26.57
Index 11.42 25.00 12.07 5.45 29.01
Sector (2) 9.74 20.40 6.69 1.53 23.21
Discrete year performance to date (%)
12 months ending: Nov-13 Nov-14 Nov-15 Nov-16 Nov-17
X Class (OCF: 1.24%) (1) 23.61 13.59 0.22 23.10 9.41
C Class (OCF: 1.99%) 22.68 12.75 -0.54 22.18 8.59
Index 24.35 14.53 3.86 24.95 14.77
Sector (2) 20.21 8.93 0.13 18.75 12.82
Source: Financial Express, bid to bid basis, total return.

Notes

(1) The performance numbers displayed here are calculated in GBP (Sterling). Please note: The Fund's X class was launched on 15/02/2012. The performance shown is a simulation for X class performance being based on the actual performance of the Fund's E class, which has the same annual management charge as the X class, and has existed since the Fund's launch. The Fund's E class is denominated in USD but for the purposes of this performance data its performance is calculated in GBP. Hence the Fund's E Share class is used here to illustrate the performance of a GBP-based clean-fee (RDR-compliant) share class since the Fund's launch on 31.12.10.

(2) The performance of the IA Global Equity Income sector is based on the average of the highest fee share class of each constituent fund, e.g. C class for the Guinness Global Equity Income Fund, with an annual management fee of 1.5%.

Latest Guinness Global Equity Income Report

Nov '17

November update

Aug '17

Monthly update

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Archive

Investment Process

Insights

Sep '17

Some thoughts on equally-weighted portfolios
Matthew Page explores the reasons behind running a concentrated, equally-weighted portfolio.

Nov '16

Implications of the US election result Ian Mortimer and Matthew Page discuss the consequence of the US election results.

Feb '16

Five year history of the Fund
As the Fund passes its fifth anniversary, managers Ian Mortimer and Matthew Page analyse its performance so far and how their portfolio has evolved.

Mar '14

Physics envy
Matthew Page investigates the “science” of economic modelling

Dec '12

Some thoughts on equities and bonds
Ian Mortimer discusses the benefits of bonds and equities and the hunt for safety in an inflationary environment

Nov '12

To meet or not to meet
Matthew Page discusses the merits of meeting company management

Mar '12

Why dividends matter
Ian Mortimer and Matthew Page investigate the importance of dividends in the pursuit of returns

Press

Nov '17

Why the outlook for global dividend growth isn’t doom and gloom
Ian Mortimer and Matthew Page, who head up the Guinness Global Equity Income fund, tell FE Trustnet why they’re confident of finding attractive income-paying opportunities.

Sep '16

Fund buy list radar: wealth managers toast Guinness
Citywire look at the funds that are building sufficient assets and have the track record to be coming onto buy list radars

Sep '16

How important are face-to-face company meetings?
Guinness AM’s Matthew Page, co-manager of the Global Equity Income & Global Innovators funds, gives his take on the value and limitations of meeting company management.

Apr '16

Funds to Watch
Against a backdrop of the ongoing debate about the Investment Association’s yield criteria for the UK Equity Income sector, Ian Mortimer and Matthew Page, co-managers of the $147m Guinness Global Equity Income fund, have highlighted the benefits of a broader approach in this area.

Apr '16

Fund of the week: Guinness Global Equity Income
Matthew Page, co-manager of the Guinness Global Equity Income fund, explains the test each share must pass to win a place in his 35-stock portfolio

May '15

EM exposure pays off for Guinness duo
FT Adviser discuss the Fund’s emerging market exposure with co-manager Ian Mortimer

Feb '15

Press release – Global Equity Income early investor share class closing
Guinness are closing the early investor (“Z”) share class on its Global Equity Income Fund on 30th April 2015.

Aug '14

Physics envy – economists’ hunt for natural laws of markets
Matthew Page discusses economists’ failure to identify deterministic “natural laws” of markets.

Jun '14

Fund update from Charles Stanley Direct: Guinness Global Equity Income
Charles Stanley’s Rob Morgan gives his verdict on Guinness Global Equity Income Fund and its up and coming managers.

May '14

Cheap Asian stocks – Matthew Page
Asian stocks are good value versus their history, and scoring well on our stock screening.

Aug '13

Prospects for Global Equities
Ian Mortimer discusses the state of the markets amid potential Fed relief tapering with Business News Network.

Fact sheets
For information on the Fund’s current investments, please see the latest fact sheet: English French German Italian
Key facts
Launch date 31/12/2010
Fund managers
(start date)
Ian Mortimer (31/12/2010)
Matthew Page (31/12/2010)
Benchmark MSCI World Index
IA sector IA Global Equity Income
Structure OEIC (UCITS)
Domicile Ireland
Redemption fee 2% within 30 days of purchase
 
Underlying currency US Dollar
Pricing Daily, forwards
Valuation 2300 Dublin time
Deal cut off time 1500 Dublin time
Administrator Link Fund Administrators (Ireland) Ltd
Custodian JP Morgan Bank (Ireland) plc
UK Reporting Fund status Yes
ISA Eligible Yes
Share classes
0.99% OCF 0.74% OCF
For charities
1.24% OCF 1.49% OCF 1.99% OCF
Currency GBP / USD / EUR GBP GBP / USD USD / EUR GBP / USD / EUR
Initial charge 0% 0% 0% 0% 5%
OCF* (Total ongoing charges p.a.) 0.99% 0.74% 1.24% 1.49% 1.99%
Accumulation or Distribution Accumulation Distribution Distribution Distribution Distribution Accumulation Distribution
Country registrations UK, SGP UK, SGP UK, CH, LUX, FIN, SGP, GER UK, CH, LUX, FIN, SGP,
USD class: AT, GER, IT
UK, CH, LUX, FIN, SGP, AT, IT
EUR class: GER
UK, SGP
EUR class: AT, CH, GER, IT, LUX, FIN
UK, CH, LUX, FIN, SGP
USD class: AT, GER, IT
Share class name Y Acc Y Dist Z GBP: “X”
USD: “E”
USD: “A”
EUR: “D”
C Acc USD: “B”
GBP: “C”
ISIN codes GBP: IE00BVYPNY24
USD: IE00BVYPNX17
EUR: IE00BVYPNZ31
GBP: IE00BVYPP131
USD: IE00BVYPP248
EUR: IE00BVYPP024
GBP: IE00B754QH41 GBP: IE00B7LM5753
USD: IE00B67PB391
USD: IE00B3QG6N78
EUR: IE00B66B5L40
GBP: IE00BVYPNV92
USD: IE00BVYPNW00
EUR: IE00BGHQF631
GBP: IE00B3PB1722
USD: IE00B42XCP33
Bloomberg tickers GBP:
GUGYGBA ID
USD:
GUGYUSA ID
EUR:
GUGYEUA ID
GBP:
GUGYGBD ID
USD:
GUGYUSD ID
EUR:
GUGYEUD ID
GBP:
GUGLEIZ ID
GBP:
GUGLEIX ID
USD:
GUGLEIE ID
USD:
GUGLEIA ID
EUR:
GUGLEID ID
GBP:
GUGCGBA ID
USD:
GUGCUSA ID
EUR:
GUGLECE ID
GBP:
GUGLEIC ID
USD:
GUGLEIB ID
*OCF = Ongoing Charges Figure, which includes the annual management charge.

Country codes

UK
United Kingdom
CH
Switzerland
LUX
Luxembourg
FIN
Finland
SGP
Singapore (professional only)
GER
Germany
FR
France
IT
Italy (professional only)