RSMR has added the onshore version of Guinness Global Equity Income to its list of rated funds.
The £1.4bn Dublin Oeic version of the fund has been rated by RSMR since March 2014 and now the onshore version has been added to the ratings agency’s rated list after its latest monthly review.
The UK-domiciled version of fund, managed by Matthew Page and Ian Mortimer (pictured), was unveiled in October last year. Commenting at the time, Guinness AM chief executive Edward Guinness said the launch was in response to growing demand from advisers and investors who prefer a UK-domiciled structure.
The Dublin Oeic, launched in December 2010, invests in companies that have generated persistently high return on capital over the past decade and are expected to pay a sustainable dividend into the future. It aims to hold about 35 equally weighted holdings, although actual position sizes vary due to relative outperformance or underperformance.
According to FE Fundinfo data, the Dublin Oeic is top quartile over three and five years, delivering returns of 38.3% and 84%, respectively, compared with the IA Global Equity Income sector average of 26.1% and 63.6%.
On a one-year horizon, the fund is third quartile, having returned 19.1% compared with the sector’s 21.9%.
Why RSMR has rated the strategy
RSMR’s research team said the strategy picked up the rating due to it having a consistent management team since launch in 2010, a strong conviction-led philosophy with a closely adhered to process, as well as a moderate dividend yield target with growing income stream.
The team also highlighted its focus on good quality companies with a high cashflow return on investment and low levels of debt, as well as its strong long-term performance record.
The RSMR research team said: “The process is relatively straightforward to understand and rigidly applied and leads to a focus on quality companies with relatively low levels of debt that have the capability to provide an attractive, growing dividend for a reasonable period of time.
“The lack of specific focus on dividend yield gives the managers a degree of flexibility with the final stock selection. Performance within the sector has been strong and volatility levels have typically been towards the lower end of the peer group, thereby vindicating the lower risk stock picking approach, despite the concentrated portfolio.
“There are likely to be shorter-term periods when the strategy underperforms but for patient investors, we believe the fund has the potential to outperform both its peers and the global equity index.”
See also: Edward Guinness – ‘We are very cautious on M&A as a way to add value’
