Guinness Asset Management is closing the ‘early investor’ Z share class of its Global Equity Income Fund to new investment
The Z class shares were launched in December 2011 on the first anniversary of the fund with an AMC of 0.25%, and were designed to attract early adopters and grow the fund from its sub USD1 million size at that time.The fund has now reached USD120 million and the Z class shares are scheduled to close on 30 April 2015. Any investments in the Z class at that date will retain the 0.25% AMC (0.74% OCF) in perpetuity, but the Z class will no longer be available for new investments, with one exception – registered charities.
“We are pleased with the growth in the Fund’s size over the last three years”, says co-manager Ian Mortimer. “It’s well documented in the press that it’s getting harder for small fund groups to raise assets and get funds up to scale in popular, competitive sectors. So it’s encouraging to see our track record getting the recognition we think it deserves.”
The fund has grown from USD26 million at the start of 2103 to USD120 million today, including inflows of USD16 million so far in 2015.
This growth comes on the back of strong performance in its peer group. Since launch in December 2010, the Fund is 3rd out of 20 funds in the IA Global Equity Income sector, and one of only four funds to have beaten the MSCI World Index. “Perhaps it’s no surprise that the bulk of income-oriented funds have underperformed in a market that’s up 50%, but it’s pleasing to be one of a small group of funds to have outperformed – testimony to our focus on both quality and value, as opposed to just high yield”, says co-manager Matthew Page.
The fund’s performance is competitive shorter-term too: it’s 5th out of 33 over one year.
Managers Page and Mortimer apply a particularly rigorous stock screening approach in defining their investment universe. “To be considered for investment companies must deliver ten consecutive years of return-on-capital over 10%. That’s a big ask,” says Page. “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.”
“Yield isn’t our filter, and nor is it our primary objective. Quality and value are paramount, giving us the combination of steady capital and dividend growth that we aim to deliver,” says Mortimer. “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.”