European Equity Income - April Commentary
Nick Edwards Portfolio Manager, European Equity Income
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Will James Portfolio Manager, European Equity Income
This is a marketing communication. Please refer to the prospectus, supplement and KID/KIID for the Funds before making any final investment decisions. The value of this investment can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you invested.
Past performance does not predict future returns.
In March, the Guinness European Equity Income Fund returned -1.5% in GBP, while the MSCI Europe ex UK Index returned -3.0%. We are pleased to see this outperformance during the month's pull-back in European equities which followed their strong start to the year. Over Q1, the Fund rose +5.3% while the Index was up +7.4%. Further performance data is shown below.
Over the quarter, European index returns were led by banks and defence stocks, sectors which the fund does not invest in because of our focus on persistently high return on capital. Our non-bank Financials holdings Euronext, Deutsche Boerse and Helvetia, the Swiss insurer, were the portfolio's leading stocks. The laggards were Capgemini, Publicis Groupe and Novo Nordisk, which has been de-rated, despite very good reported numbers, following its Cagrisema drug trial and the uncertainty regarding tariffs.
Indeed, since the end of the quarter, President Trump appears to have ripped up the trade playbook in his attempt to fulfil his ‘MAGA’ agenda. Europe (and the Rest of the World ex US) still has to reconsider its relationship with the US under the Trump administration, and there are signs that investors were starting to look at Europe again with renewed interest. Interestingly, despite the initial rally in markets to the end of the quarter, European equities still look relatively attractive versus the US in terms of valuation, with a price-earnings (PE) ratio still well below the 20-year average discount to US equities (in beige).
MSCI Europe ex UK price/earnings ratio relative to MSCI USA. Source: MSCI data, as of 31.03.2025.
While forward visibility is as low as ever, it is pleasing to see that the portfolio has performed as we would have expected against its benchmark in Q1 with the combination of its quality, valuation and dividend focus contributing to outperformance on the downside.
In this commentary we consider the market environment, fund positioning and the outlook.
Past performance does not predict future returns
Fund launch: 19.12.2013
Source: FE fundinfo. Net of fees. Investors should note that fees and expenses are charged to the capital of the Fund. This reduces the return on your investment by an amount equivalent to the Ongoing Charges Figure (OCF). The OCF for the calendar year 2024 for the share class used for the fund performance returns was 0.89%. Returns for share classes with a different OCF will vary accordingly. Transaction costs also apply and are incurred when a fund buys or sells holdings. The performance returns do not reflect any initial charge; any such charge will also reduce the return.
The value of this investment can fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you invested.
Learn more about Guinness European Equity Income
Guinness European Equity Income
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The information provided on this page is for informational purposes only. While we believe it to be reliable, it may be inaccurate or incomplete. Any opinions stated are honestly held at the time of publication, but are not guaranteed and should therefore not be relied upon. This content should not be relied upon as financial advice or a recommendation to invest in the Funds or to buy or sell individual securities, nor does it constitute an offer for sale. Full details on Ongoing Charges Figures (OCFs) for all share classes are available here.
The Guinness European Equity Income Funds are designed to provide investors with exposure to high-quality dividend-paying companies in the Europe ex UK region. The Funds aim to provide capital appreciation and a source of income that has the potential to grow over time. The Funds are actively managed and use the MSCI Europe ex UK Index as a comparator benchmark only.
For the avoidance of doubt, if you decide to invest, you will be buying units/shares in the Fund and will not be investing directly in the underlying assets of the Fund
Guinness European Equity Income Fund
Documentation
The documentation needed to make an investment, including the Prospectus, the Key Information Document (KID) / Key Investor Information Document (KIID) and the Application Form, is available from the website www.guinnessgi.com , or free of charge from:
- the Manager: Waystone Management Company (IE) Limited, 2nd Floor 35 Shelbourne Road, Ballsbridge, Dublin DO4 A4E0 or,
- the Promoter and Investment Manager: Guinness Asset Management Ltd, 18 Smith Square, London SW1P 3HZ.
Waystone IE is a company incorporated nder the laws of Ireland having its registered office at 35 Shelbourne Rd, Ballsbridge, Dublin, D04 A4E0 Ireland, which is authorised by the Central Bank of Ireland, has appointed Guinness Asset Management Ltd as Investment Manager to this fund, and as Manager has the right to terminate the arrangements made for the marketing of funds in accordance with the UCITS Directive.
Investor Rights
A summary of investor rights in English, including collective redress mechanisms, is available here: https://www.waystone.com/waystone-policies/
Residency
In countries where the Funds are not registered for sale or in any other circumstances where their distribution is not authorised or is unlawful, the Funds should not be distributed to resident Retail Clients. NOTE: THIS INVESTMENT IS NOT FOR SALE TO U.S. PERSONS.
Structure & Regulation
The Funds are sub-funds of Guinness Asset Management Funds PLC, an open-ended umbrella-type investment company, incorporated in Ireland and authorised and supervised by the Central Bank of Ireland, which operates under EU legislation. The Funds have been approved by the Financial Conduct Authority for sale in the UK. If you are in any doubt about the suitability of investing in these Funds, please consult your investment or other professional adviser.
WS Guinness European Equity Income Fund
Documentation
The documentation needed to make an investment, including the Prospectus, the Key Investor Information Document (KIID) and the Application Form, is available in English from https://www.waystone.com/our-funds/waystone-fund-services-uk-limited/ or free of charge from:-
Waystone Management (UK) Limited, PO Box 389, Darlington DL1 9UF.
E-Mail: wtas-investorservices@waystone.com
Waystone Management (UK) Limited is authorised and regulated by the Financial Conduct Authority.
Residency
In countries where the Fund is not registered for sale or in any other circumstances where its distribution is not authorised or is unlawful, the Fund should not be distributed to resident Retail Clients.
Structure & regulation
The Fund is a sub-fund of WS Guinness Investment Funds, an investment company with variable capital incorporated with limited liability and registered by the Financial Conduct Authority.