Guinness Global Equity Income
Guinness Global Equity Income fund aims to provide investors with both income and long-term capital growth. The portfolio typically consists of around 35 equally-weighted stocks, which the managers aim to hold for three to five years. They focus on how well, and how consistently, a company can use money to generate returns. They also have substantial freedom to entirely avoid countries and sectors they don't like.
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Matthew is the portfolio manager for both the Guinness Global Equity Income strategy and the Guinness Global Innovators strategy. He joined Guinness in 2005, having previously worked at Goldman Sachs in Foreign Exchange and Fixed Income after joining their graduate scheme in 2004. Matthew graduated from New College, University of Oxford, with a Master’s degree in Physics and is a CFA Charterholder.
Ian is the portfolio manager for the Guinness Global Equity Income strategy and the Guinness Global Innovators strategy. He joined Guinness in 2006 after completing a D.Phil. in experimental physics at Christ Church, University of Oxford. Ian holds a First Class Honours Master’s degree in Physics from University College London, earned in 2003, and is a CFA Charterholder.
Matthew is the portfolio manager for both the Guinness Global Equity Income strategy and the Guinness Global Innovators strategy. He joined Guinness in 2005, having previously worked at Goldman Sachs in Foreign Exchange and Fixed Income after joining their graduate scheme in 2004. Matthew graduated from New College, University of Oxford, with a Master’s degree in Physics and is a CFA Charterholder.
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Company Description
Guinness Global Investors was established in 2003 by Founder and Chairman Tim Guinness. It is an independent active fund manager specialising in long-only equity funds and private equity investments. At heart, it is a value (or growth at reasonable value) investor. Managers combine strategic sector selection with a fundamental screening process to identify stock opportunities and result is a suite of high conviction, equally weighted portfolios. The company has a collegiate culture, with teams across the business benefiting from each other’s expertise in achieving positive outcomes for investors.
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Quote from the Fund Manager
We both studied physics at Oxford, so we have a natural preference for good metrics rather than good stories. We try to find the clear signals among the noise of the market.
Matthew Page
Co-Manager
Investment process
Matthew and Ian target those companies that consistently create value for shareholders through an entire business cycle. They use a screening process based on ten consecutive years of high returns on capital invested. This creates an investable universe of around 600 stocks, from 16,000 global names. Those with a market value below US$1 billion and with high debts are further filtered out, leaving the managers with around 500 stocks to analyse. They use an in-house model that identifies stocks trading at a discount relative to the market, their peers and their own historical price, with a focus on returns the company has control over. An exploration of company financials then brings them down to the 35 holdings for the portfolio on a one-in, one-out basis.
Risk
The fund's volatility has been about average relative to its peers. There is no bias towards any particular investment style, which means the portfolio will be less affected by which style is currently in favour, dampening volatility. The managers avoid companies that are highly cyclical or highly leveraged. However, it is important to note that the risk of a single stock adversely impacting the portfolio is higher due to the low number of holdings within Guinness Global Equity Income fund.
ESG
ESG - Limited
Guinness’ approach is to focus on quality companies and invest with a valuation discipline. The managers believe this approach gives them an implicit bias towards better ESG characteristics. These quality characteristics are both financial and non-financial and will determine whether a firm can create value throughout a business cycle. ESG factors are considered part of this, especially those that carry a material risk to the future returns of the business. This means that in practice, many firms with negative ESG profiles, such as oil & gas and mining companies, do not pass the process and are therefore not included in the portfolio, but there are no specific ESG restrictions on their inclusion.
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