TB Guinness Global Innovators Fund
The TB Guinness Global Innovators strategy provides exposure to global equities through a portfolio of companies that we believe can create value through original thinking.
The Guinness Global Innovators strategy provides exposure to global equities through a portfolio of companies that we believe can create value through original thinking.
We believe that innovative companies in any industry can maintain competitive strengths that translate into long-term outperformance.
Innovation can enhance a company’s products, services or business model. It can be dramatic, where companies create new markets or disrupt incumbents, or more subtle, where it engenders small but important advances that create a sustainable competitive advantage. Innovative companies can experience faster profit growth and higher profit margins, while their secular growth opportunities mean they can be less susceptible to the economic cycle.
The benefits can also accrue to the consumer; better processes, better products and better services mean an enhanced consumer experience, creating loyal customers which drive profit growth.
Innovation is more than just leading technology, or the preserve of early-stage companies – it exists in all sectors and in companies young and mature. As investors, we believe innovation offers a superior way to identify the growth stocks that can sustain high returns on capital for longer.
High quality funds are run by high quality people.
We pride ourselves of having a collegial culture, with teams across the business successfully working together to achieve positive outcomes for our investors.
Awards & Ratings
We have a firm commitment to delivering the very best. That commitment is reflected in the awards we have received, some of which are shown below.
Guinness Global Innovators Fund
Elite Rated Fund
Guinness Global Innovators Fund
A-Rated Fund (Germany)
Guinness Global Innovators Fund
A-Rated Fund (Austria)
Guinness Global Innovators Fund
A-Rated Fund (Switzerland)
How to Invest
We aim to make it simple to invest in our funds. All our funds are open to direct investment via an application form. They are widely available on investment platforms and are eligible for UK investors’ ISAs and SIPPs.
FINDING COMPANIES WITH AN INNOVATIVE ADVANTAGE
Q: How many species of woodpecker are there globally?
A: There are around 200 species of Woodpeckers in the world.
The investment process begins by identifying innovative companies. We assess all sectors to identify themes that are driving growth, disrupting incumbent business models or technology, or significantly improving current products or services. We also utilise third party research to further broaden our understanding and identify around 10 themes which are updated annually. We then identify companies with exposure to these secular growth themes and a market capitalisation greater than $1bn.
Not every innovative company is a good investment, and we screen for (i) return on capital greater than cost of capital last year (ii) debt/equity < 150%, and (iii) positive earnings growth expected next year. Recognising that hype can surround innovative companies, we maintain a value discipline as we generate ideas using further screening. We then subject stock ideas to a thorough due diligence process and assemble an equally weighted portfolio of 30 positions.
Why Invest in the TB Guinness Global Innovators Fund?
The Fund is designed to provide investors with exposure to global equities through a high conviction, low turnover portfolio of companies that we believe can create value through original thinking.
We believe innovative companies outperform
Top line growth can come about by shorter time to market, increased sales or successful product launches. Bottom line improvements can come from reduced development or production costs. Innovative companies should achieve a higher return on capital than their peers and therefore outperform the index over a cycle.
The Fund typically invests in just 30 companies, with each company having an equal weighting. This provides a good balance between the benefits of diversification while also allowing each company to add meaningfully to performance. We don’t have a long tail of small positions and by definition we can never just ‘hug’ the benchmark index.
We focus on ‘bottom-up’ stock selection rather than trying to make decisions based on an expected outlook for the world economy. We like to invest in innovative companies that have the ability to earn above average return on capital. Sentiment and hype can often drive up valuations of some innovative companies; we maintain a strict value discipline to make sure we don’t overpay for future growth.
We prefer to invest over the long term. We also recognise the increased costs of trading in and out of companies unnecessarily. Typically we will hold a company in the portfolio for between 3 and 4 years.
Repeatable and independent
Ian Mortimer and Matthew Page have managed funds in accordance with this investment process since 2010, and the strategy has been applied since 2003. The process is clear, robust, transparent and scalable. It filters out much of the noise and hype that surrounds companies to focus on the true signals that drive company valuations. By performing their own company research and analysis, using their own proprietary modelling systems, the managers try to avoid some of the behavioural biases associated with being unduly influenced by market sentiment.
How do we run the Fund?
Identifying innovative companies
The investment process begins by identifying innovative companies. We assess all sectors to identify trends and themes that are driving growth, disrupting incumbent business models or technology, or significantly improving current products or services. We utilise third party research and analysis to further broaden our understanding of the secular growth trends in the market. Typically, we identify 10-15 themes at any one time and update them annually. We then identify companies with exposure to these secular growth themes which have a market capitalisation greater than $0.5bn.
With the initial universe of innovative companies created we then employ a quality screen to select only those businesses that are “good companies”. We only want to invest in profitable companies, with strong balance sheets, that have good growth prospects and emphasise that our process is intended to find not just innovative companies, but good quality innovative companies. The simple quality criteria screened for are (i) return on capital greater than cost of capital last year (ii) debt/equity < 150%, and (iii) positive earnings growth expected next year. The companies left after the quality screen make up the investible investment universe for the fund and typically have better than average financial metrics showing faster profit growth, larger profit margins, and less susceptibility to cyclical pressures.
Further research and stock selection
From this universe of good quality, innovative companies, we then seek to identify which of them are undervalued. We screen all these innovative companies to identify which are the most attractive in terms of valuation, return on investment, earnings sentiment, and price momentum. By ranking companies using these four criteria, we can sift through the data to prioritise candidates for extended due diligence, testing and research. Having identified candidates for further due diligence, we subject all potential investments to detailed fundamental analysis. Above all, we want to understand what competitive advantages or barriers to entry are sustaining a company’s return on investment to determine whether the returns will persist. We also recognise that sentiment and hype can sometimes drive up the valuations of innovative companies and so we try to maintain a strict value discipline. We want to avoid paying up for high levels of expected growth in the future as we know, on average, very high growth expectations are often not met, and this can have a detrimental effect on a company’s valuation. We therefore look for companies offering good value relative to their sector, to their historic valuations, or in absolute terms.
It is often easier to find companies to buy that look cheap than it is to identify those companies you own which should be sold. We consider sell discipline as important as selecting companies for purchase and continuously monitor the companies we hold in the Fund. The six core reasons we may sell a company are outlined below.
- The company no longer qualifies as innovative
- Their balance sheet becomes stretched
- The valuation becomes too rich, or no longer offers compelling upside
- There is a change in a company’s capital budgeting approach
- Our original investment thesis no longer holds
- We find a more compelling investment idea
How do we construct the portfolio?
The TB Guinness Global Innovators Fund is a concentrated portfolio of around 30 equally weighted stocks. This provides a number of useful attributes:
- It reduces stock-specific risk, as we will not be overweight in a small number of favourite companies.
- We will not have a long tail of small holdings in the portfolio, which can be a distraction and a potential drag on performance.
- It instils a strong sell discipline as we must typically sell a position in order to make way for a new one; and we must constantly assess the companies we own in the portfolio in comparison to the rest of the universe available to us.
- We are truly index independent. All companies held are weighted equally without regard to their weighting in the benchmark index, so our portfolio has a high active weight.
For information on the Fund’s current investments, please see the latest fact sheet available on the literature tab above.
Matthew Page (30/12/2022)
For full information on the share classes available for investment please refer to the Key Investor Information document.
The Funds are priced every working day at 12:00 UK time and updated here shortly after.
|Fund name||Isin||Fund price||(+/-)||Date|
|TB GUINNESS ASIAN EQUITY INCOME FUND Y INCOME GBP||GB00BMFKG774||89.87||0.26||29/09/2023|
|TB GUINNESS ASIAN EQUITY INCOME FUND Y ACCUMULATION GBP||GB00BMFKG667||99.23||0.3||29/09/2023|
|TB GUINNESS EUROPEAN EQUITY INCOME FUND Y INCOME GBP||GB00BP5J6N11||105.21||1.92||29/09/2023|
|TB GUINNESS EUROPEAN EQUITY INCOME FUND Y ACCUMULATION GBP||GB00BP5J6M04||108.03||1.97||29/09/2023|
|TB GUINNESS EUROPEAN EQUITY INCOME FUND Z INCOME GBP||GB00BP5J6Q42||105.56||1.92||29/09/2023|
|TB GUINNESS EUROPEAN EQUITY INCOME FUND Z ACCUMULATION GBP||GB00BP5J6P35||108.47||1.98||29/09/2023|
|TB GUINNESS GLOBAL EQUITY INCOME FUND Y INCOME GBP||GB00BNGFN669||130.82||0.77||29/09/2023|
|TB GUINNESS GLOBAL EQUITY INCOME FUND Y ACCUMULATION GBP||GB00BNGFN776||139.76||0.81||29/09/2023|
|TB GUINNESS GLOBAL INNOVATORS FUND Y ACCUMULATION GBP||GB00BP5J5Y50||120.78||1.01||29/09/2023|
|TB GUINNESS SUSTAINABLE ENERGY FUND Y ACCUMULATION GBP||GB00BP5J6198||89.96||0.87||29/09/2023|
|TB GUINNESS SUSTAINABLE ENERGY FUND Z ACCUMULATION GBP||GB00BP5J6206||90.1||0.87||29/09/2023|
|TB GUINNESS SUSTAINABLE GLOBAL EQUITY FUND Y ACCUMULATION GBP||GB00BP5J7C70||101.91||1.39||29/09/2023|
|TB GUINNESS SUSTAINABLE GLOBAL EQUITY FUND Z ACCUMULATION GBP||GB00BP5J7D87||102.27||1.39||29/09/2023|
|TB GUINNESS UK EQUITY INCOME FUND O OVERSEAS INCOME||GB00BYX94G55||69.26||1.21||29/09/2023|
|TB GUINNESS UK EQUITY INCOME FUND O OVERSEAS ACCUMULATION||GB00BYX94F49||89.18||1.54||29/09/2023|
|TB GUINNESS UK EQUITY INCOME FUND Y CLEAN INCOME||GB00BYX94J86||74.66||1.3||29/09/2023|
|TB GUINNESS UK EQUITY INCOME FUND Y CLEAN ACCUMULATION||GB00BYX94H62||95.58||1.67||29/09/2023|
|TB GUINNESS UK EQUITY INCOME FUND Z EARLY INVESTOR INCOME||GB00BYX94L09||75.49||1.31||29/09/2023|
|TB GUINNESS UK EQUITY INCOME FUND Z EARLY INVESTOR ACCUMULATION||GB00BYX94K91||96.83||1.69||29/09/2023|
Guinness Global Innovators - Webcast - Covering Q2 2023
Guinness Global Innovators - Review of Q1 2023
Guinness Global Innovators - Webcast - Covering Q1 2023
Guinness launches OEIC versions of four Irish funds
Guinness Global Innovators Fund - Webcast - Covering Q4 2022
Guinness Global Innovators Fund - Webcast - Covering Q3 2022
Guinness Global Innovators Fund - Webcast - Covering Q2 2022
Why Mangos and chips should be on the menu for long-term investors
The Richard Hunter Interview: Ian Mortimer on Guinness Global Equity Income
Drilling for innovation
Q: What speed does a woodpecker’s beak strike wood?
A: 25 mph/40kph
How to Invest
We’ve tried to make investing in our Funds as simple as possible. All of our funds are available to invest directly via an application form, we also have good availability across a number of investment supermarkets whilst being eligible for ISAs & SIPPs.