The Guinness Global Money Managers Fund gives investors exposure to the growth potential of companies in the asset management sector.

The Fund is managed for capital growth and invests in companies engaged in money management services (primarily asset management, but also wealth management, stock exchanges, custodian and trustee services and other specialist service providers).

We believe that, over the long term, asset management companies can grow their earnings faster than the general equity markets. Successful asset management businesses can grow very rapidly, particularly in rising markets. Their risk-return characteristics are especially attractive from a shareholder’s point of view, since they tend to require relatively little capital to grow. Asset management is also a growing global sector: assets under management are rising faster than underlying equity markets.

The Fund is a long-only equity portfolio of around 30 equally-weighted positions. 80% of the Fund is normally invested in companies with a market capitalisation over $500 million.

Awards
LIPPER_FA_AWARD_HOR_SWITZERLAND (2) Guinness Global Money Managers Fund
BEST FUND OVER 3 YEARS
Equity Sector Banks & Other Financials

In brief: why invest in a fund of asset managers?

High returns on capital
Successful asset management companies can grow using relatively little capital. Overall shareholder returns can therefore be very high
Growing global sector
Global conventional assets under management are growing faster than world equity returns, supporting growing revenues in the sector
Low balance sheet risk
Money management companies tend to have very low gearing versus other financial sectors (especially banks), reducing balance sheet risk
Above average dividend yield
The sector typically exhibits high free cashflow, which translates into higher dividend yields on average than the broad equity market
Higher beta
The sector has the potential to outperform the market (capture higher beta) during periods of market strength, particularly in equities

Investment case for a portfolio of asset managers

Asset managers have a number of characteristics which make them particularly interesting from a shareholders point of view.
  1. High returns on capital

    A key attraction of the money management industry is that successful companies can enjoy both very high rates of return on capital (not much is required) and a growth rate higher than the underlying investment returns as additional assets are raised. Overall shareholder returns can therefore be very high.

  2. Growing global sector

    The value of assets under management globally has grown faster than the performance of equity markets. Since 1990, new investable companies and increasing personal wealth have helped grow conventional assets under management by 700%, versus world equity returns of 150%. We expect this trend to continue. An expanding pool of assets provides an attractive environment for good asset managers to grow.

  3. Financials exposure with lower balance sheet risk

    For investors who are concerned about the fragility of bank balance sheets globally, we believe this Fund gives exposure to the attractive growth and return attributes of the financial sector whilst lessening the balance sheet risk. The average gearing of the underlying companies held in the Fund has been consistently less than zero (i.e. overall net cash).

  4. Above average dividends

    Asset management companies often deliver high free cash flow, which translates into higher dividend yields on average than the broad equity market. The gross dividend yield paid by the companies in our universe of asset managers has been consistently higher than the MSCI World Index gross yield. (You should note that Guinness Global Money Managers Fund is managed for total returns, and has not paid out dividends to investors in the past. There is currently no intention to do so in the future.)

  5. Higher beta

    In periods of rising equity markets, asset management companies focusing on managing equities can enjoy a rising income without adding any new customers. They effectively provide a geared exposure to rising equity markets. So the Fund is a means for investors to capture higher beta during periods of market strength, particularly in equities.

  6. Potential for rapid growth

    A final interesting characteristic is that a successful asset management company can grow its business very rapidly if markets are rising and the underlying performance of its fund range is strong. To date we have had our best successes in the Fund by identifying and investing in this type of company.

  7. Favourable environment for investing in asset management companies

    If you believe that global equity markets are set on a path of reasonable long-term growth, albeit at likely lower returns than of old, and in an environment of rising global invested assets, a diversified portfolio of listed asset managers can play a useful role in your portfolio.

Fund Managers

tim_guinness

Tim Guinness

Tim Guinness is the founder and Chief Investment Officer of Guinness Asset Management and Guinness Atkinson Asset Management, our sister US business. He has over 35 years’ investment experience.

He founded Guinness Flight Global Asset Management Ltd in 1987 and was CEO (or joint CEO) from 1987 to 1999 and a portfolio manager of the Global Equity Fund. After Investec acquired Guinness Flight in 1998, he was Chairman of the company during the transition into Investec, as well as lead manager of the Investec Global Energy Fund.

In 2003 he left Investec to set up Guinness Asset Management, which was appointed the outsource manager of Investec Global Energy Fund.

Tim graduated from Cambridge University with a degree in engineering. He then completed a Master’s Degree in Management Science at the Sloan School M.I.T. in the United States.

Tim is co-manager of the Guinness Global Energy Fund and the Guinness Global Money Managers Fund.

Will Riley, Guinness Asset Management B&W web

Will Riley

Will joined Guinness Asset Management in May 2007, and is co-manager of Guinness Global Energy Fund and the Guinness Global Money Managers Fund.

Prior to joining Guinness, Will was employed by PricewaterhouseCoopers for six years, first in the London Middle Market Assurance Team, then as a valuation specialist in the Valuation & Strategy division. Will qualified as a Chartered Accountant in 2003 and graduated from the University of Cambridge with a Master’s Degree in Geography.

Investment process

We seek quality asset management companies at the right price.
Underlying Asset Management Performance

Identifying high quality asset managers

Our process starts with identifying the global investment universe of companies engaged in asset management services. The majority of the universe comprises companies where asset management is the main activity; however, we also look at associated services such as custody banks and stock exchanges. We analyse the universe regularly for companies which look attractive on valuation, return on investment, earnings sentiment and price momentum. In plain English – good companies that are attractively valued where investor sentiment is improving and investor buying is occurring. For the asset managers, we add an important fifth criteria: superior underlying asset management performance. This process is designed to give us a portfolio of reasonable value, good quality, successful asset management companies which we hope will provide a shareholder return in excess of the broad equity market.

Stock due diligence

Stock ideas are taken from our screens. We then conduct due diligence to establish whether we have conviction to include the stock in our portfolio. The due diligence centres around detailed financial modelling.

Portfolio construction

Equally-weighted portfolio

The portfolio comprises 30 equally-weighted positions. Our equally-weighted portfolio construction is designed to create the best balance between maintaining fund concentration and managing stock-specific risk. It also imposes a structural sell discipline: an existing position must be sold to purchase a new holding.

Sector weights

There is no benchmark adherence in the Fund’s sub-sector weights.

Portfolio risk controls

Stock specific risk

By constructing the fund of 30 equally weighted positions, we avoid significant exposure to any one individual stock.

Emerging market exposure

Emerging market exposure is normally limited to 20% of the portfolio.

Liquidity

The portfolio is liquid, with 80% of the Fund normally invested in companies with a market capitalisation over US $500 million.

Currency

The Fund is not hedged from a currency perspective.
Fund Global Money Managers Fund Date (period end) 31.10.2014
Index MSCI World Index Fund Launch 31.12.2010
Financials Index MSCI World Financials Index 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) (AMC: 0.75%) Year-to-date 1 year 3 years 5 years From launch
Fund 3.61 7.42 86.87 - 61.34
Index 8.25 9.13 50.92 76.81 41.82
Financials Index 6.89 7.16 59.96 50.47 35.65
Annualised performance (%)
X class (1) (AMC: 0.75%) 1 year 3 years 5 years 10 years From launch
Fund 7.42 23.15 - - 13.28
Index 9.13 14.69 12.07 8.39 9.54
Financials Index 7.16 16.93 8.51 3.41 8.27
Calendar year performance (%)
X class (1) (AMC: 0.75%) 2009 2010 2011 2012 2013
Fund - - -18.06 25.10 51.91
Index 15.73 15.28 -4.84 10.74 24.32
Financials Index 16.70 7.90 -17.89 23.68 24.97
Discrete year performance to date (%)
12 months ending: Oct-10 Oct-11 Oct-12 Oct-13 Oct-14
Fund X Class (AMC: 0.75%) (1) - - 13.27 53.58 7.42
Fund C Class (AMC: 1.5%) - - 12.42 52.44 6.62
Index 16.24 0.79 9.66 26.12 9.13
Financials Index 5.07 -10.47 14.18 30.74 7.16
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.

Latest Guinness Global Money Managers Report

Sign up or our monthly Global Money Managers Report by email
 Archive

Insights

Jan '14

Investing in asset managers
Will Riley researches the performance of asset manager equities over the last 20 years, in particular their power to deliver high beta returns and how consistently they outperform.

Sep '13

Asset managers and their dividends
Investment Analyst Mark Hammonds discusses asset managers’ high free cash flow and healthy dividend prospects

Press

Money Observer | Aug '14

Is Guinness Global Money Managers good for you?
Money Observer’s Lindsay Vincent investigates whether buying shares in fund managers is as good a way as any of profiting from the markets in securities.

The Daily Telegraph | Apr '14

Should you buy shares in your fund manager?
Fund managers and brokers are often highly profitable. The Telegraph’s Richard Dyson asks if you should buy their shares rather than their funds?

Investment Week | Feb '14

Backing the asset managers

Will Riley explains the risks and rewards of investing in asset managers

What investment | Apr '13

Invest in or behind your favourite funds?
What Investment’s Rob St George says this fund “invests solely in the titular Money Managers, with exceptional results.”

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)
Will Riley (31/12/2010)
Tim Guinness (31/12/2010)
Benchmark MSCI World Index
IMA sector IMA Global
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
Year end 31 December
Administrator Capita Financial Administrators (Ireland) Ltd
Custodian JP Morgan Bank (Ireland) plc
UK Reporting Fund status Yes
ISA Eligible Yes
Share classes
0.75% AMC 1% AMC 1.5% AMC
Currency USD GBP USD EUR USD GBP EUR
Accumulation or Distribution Acc Acc Acc Acc Acc Acc Acc
Name E X A D B C C EUR Acc
Initial charge 0% 0% 0% 0% 2% 5% 5%
Annual management charge 0.75% 0.75% 1.00% 1.00% 1.50% 1.50% 1.50%
OCF*
(Total ongoing charges p.a.)
1.24% 1.24% 1.49% 1.49% 1.99% 1.99% 1.99%
Minimum direct investment $10,000,000 £5,000,000 $200,000 € 100,000 $1,000 £1,000 € 1,000
Minimum platform investment Guinness Asset Management minimums do not apply. Platforms apply their own minimum investment levels.
ISIN Code IE00B3NSFR34 IE00B7MJHM43 IE00B644LY07 IE00B68GW162 IE00B3QW5Z07 IE00B64PRP62 IE00BGHQF748
SEDOL B3NSFR3 B7MJHM4 B644LY0 B68GW16 B3QW5Z0 B64PRP6 BGHQF74
Bloomberg ticker GUGLMME ID GUGLMMX ID GUGLMMA ID GUGLMMD ID GUGLMMB ID GUGLMMC ID GUGLMCE ID
Country registrations UK, CH, LUX, FIN, SGP
*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