adviser only
Guinness Asian Equity Income
Guinness Asian Equity Income fund invests in companies across the whole Asia Pacific region, including Australia. The portfolio is concentrated in just 36 equally-weighted stocks, and has a one-in, one-out policy, looking for a combination of capital and dividend growth.
Our Opinion
Fund Managers
Expand
Fund Managers
Close
Edmund is the Head of Asian & Emerging Market Investments, Chief Investment Officer, and a director on the board of Guinness Global Investors. He has managed the Guinness Best of Asia strategy since 2003 and the Guinness Asian Equity Income strategy since its inception in 2006. Edmund joined Guinness in 2003 after ten years at Guinness Flight, which became Investec post-merger. He began on the Far East Investment Desk in 1994, managing the China & Hong Kong Fund and later became its lead manager in Hong Kong. Edmund holds a Master’s degree in Management Studies from Christ Church, University of Oxford, a Bachelor’s in History from the University of York, and is an Associate of the Society of Investment Professionals.
Mark is the portfolio manager for the Guinness Asian Equity Income strategy. He joined Guinness in 2012 and previously worked at Ernst & Young, where he qualified as a Chartered Accountant. Mark graduated with a First Class degree in Management Studies from Corpus Christi College, University of Cambridge, in 2007, and is a CFA charterholder.
Edmund is the Head of Asian & Emerging Market Investments, Chief Investment Officer, and a director on the board of Guinness Global Investors. He has managed the Guinness Best of Asia strategy since 2003 and the Guinness Asian Equity Income strategy since its inception in 2006. Edmund joined Guinness in 2003 after ten years at Guinness Flight, which became Investec post-merger. He began on the Far East Investment Desk in 1994, managing the China & Hong Kong Fund and later became its lead manager in Hong Kong. Edmund holds a Master’s degree in Management Studies from Christ Church, University of Oxford, a Bachelor’s in History from the University of York, and is an Associate of the Society of Investment Professionals.
Read More
Risk
Read more
Back
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.
Fund Performance
Close
Risk
Close
Quote from the Fund Manager
If I buy a car, I look under the bonnet to see if it has a sound engine. I do the same with stocks: the engine being a strong balance sheet which will drive returns year after year, over and above what it needs for reinvestment, and which can then be distributed as dividends.
Edmund Harriss
Co-Manager
Investment process
The managers screen their universe of circa 7,000 companies for specific characteristics, using Guinness' own proprietary modelling systems. They look for companies making a real return on investment of at least 8% for each of the past eight years. Only around 7% of Asian listed companies get through this screen and the managers then reduce their universe further by excluding highly indebted companies and those less than $500 million in size. That leaves them with around 300 companies to research more thoroughly, with in-depth modelling of the businesses cash flow, capital budgeting and – last but by no means least – potential for dividend growth.
The resulting portfolio consists of 36 equally weighted companies. This equal weighting, together with their one-in, one-out policy, means there isn’t a long tail of smaller holdings, so each stock can make a meaningful contribution to performance. The holdings are rebalanced periodically to retain the equal weightings and are continually assessed to see if there are better opportunities, although turnover is relatively low (holdings are generally kept in the portfolio for three to five years).
Risk
The screening process for Guinness Asian Equity Income will filter for risk factors. The initial screen finds companies that have eight years of consistent cash generation, which gives a statistical likelihood of persistence. It will therefore filter out a lot of cyclical companies (those more linked to the economic cycle) like energy and materials names. Sector and country exposure is considered at a portfolio level with a diverse mix targeted. The portfolio's exposure is monitored regularly. A second filter removes higher risk smaller companies, as well as companies that are more indebted. The fund is benchmark agnostic and highly concentrated, meaning it has stock-specific risk.
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.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.