WS Guinness European Equity Income Fund
The WS Guinness European Equity Income strategy targets income and capital growth and provides exposure to dividend-paying companies in Europe (excluding UK).
Overview
The Guinness European Equity Income strategy targets income and capital growth and provides exposure to dividend-paying companies in Europe (excluding UK).
The European region includes a diversified mix of developed, high-income economies and is home to around 700m people. Europe has been close to the centre of all aspects of globalisation and has world-leading companies in almost all sectors of the market. Europe also has a large proportion of high-quality companies; businesses that can generate persistently high returns and that have demonstrated they can weather a variety of economic storms – and it is companies with these characteristics that are best placed to pay consistent and growing dividends.
Dividend-paying companies are well known to outperform the market in the long term, and companies that grow their dividend year-on-year even more so. Rising dividend payments can also protect against inflation over long periods.
In Europe, there is a well-established dividend paying culture going back to the 17th century, when the Dutch East India Company became the first company to pay a dividend. Companies have been committed to distributing profits to shareholders in this way ever since, reflecting not just history but also good capital discipline on the part of management teams.
Europe is not just a place for your summer holiday
Will James, co-manager of the Guinness European Equity Income strategy, argues that Europe's economic and market backdrop make it an attractive destination for equity investors.
Investment Team
High quality funds are run by high quality people.
We are proud of our collegial culture, with teams across the business benefiting from each other’s expertise as they target long-term returns for investors.
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.
Investment Case
Although the Fund is designed to invest in dividend-paying companies, our starting point in selecting our investment universe is to identify companies with consistently high return on capital. Specifically, we look at companies that have a return on capital of greater than 8% in each of the previous eight years. Our analysis shows that such companies are highly likely to continue to do so in the future – meaning they will continue to create shareholder value. On average, only 3% of European listed companies achieve our criteria, and we then exclude those less than $0.5 billion in size or with weak balance sheets. This gives us a pool of around 200 companies from which to build our portfolio.
In-depth proprietary modelling of a company’s cash flow, capital budgeting and potential for dividend growth is combined with a subjective analysis of its business model to identify candidates for inclusion in the final portfolio. By selecting companies from a broad range of industries, countries, and market capitalisation we aim to create a well-diversified portfolio which can provide a reasonable dividend yield and growing income stream at an attractive valuation relative to the broad market.
The portfolio is concentrated, with 30 typically equally weighted holdings. This structure ensures limited stock-specific risk, sell discipline and independence from any benchmark. It also precludes a long tail of small holdings and keeps the portfolio focused on our best ideas.
Why invest in the WS European Equity Income Fund?
The Fund is designed to provide investors with exposure to global equities through a high conviction, low turnover portfolio of consistently profitable dividend-paying companies.
Focus on consistent high return on capital
Consistent high return on capital is a good indication of a company’s ability to pay healthy dividends. The Fund invests in companies that are unusually consistent in generating returns on capital above their cost of capital.
Growth and income
Our approach to dividend investing is to focus on companies that can sustainably grow their dividend into the future, rather than simply looking for companies with a high dividend yield.
High conviction
The Fund typically invests in just 30 companies, with each company having a broadly 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. Please see our white paper on this topic for more information.
Fundamentally driven
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 good companies that have, in the short term, fallen out of favour, but that have previously shown an ability to weather most economic environments over time.
Low turnover
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 5 years.
Repeatable and independent
Our team have developed an investment process that is clear, robust, transparent, and scalable. Their approach 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.
The case for a European equity income fund
"Dividends make a gradual but potent contribution to long-term returns."
The European region includes a diversified mix of developed, high-income economies, and is home to around 700m people. Europe has gone through a turbulent time since the 2008/09 banking crisis, both politically and economically. However, due to its diversity, size and exposure to the global market, Europe has navigated this period better than some less developed regions.
The European region includes a diversified mix of developed, high-income economies, and is home to around 700m people. Europe has gone through a turbulent time since the 2008/09 banking crisis, both politically and economically. However, due to its diversity, size and exposure to the global market, Europe has navigated this period better than some less developed regions.
Europe has been close to the centre of all aspects of globalisation and has world-leading companies in almost all sectors of the market. Europe also has a large proportion of high quality companies; businesses that can generate persistently high returns and that have demonstrated they can weather a variety of economic storms – and it is companies with these characteristics that are best placed to pay consistent and growing dividends.
Dividend-paying companies are well known to outperform the market in the long term, and companies that grow their dividend year-on-year even more so. Rising dividend payments can also protect against inflation over long periods.
In Europe, there is a well-established dividend paying culture going back to the 17th century, when the Dutch East India Company became the first company to pay a dividend. Companies have been committed to distributing profits to shareholders in this way ever since, reflecting not just history but also good capital discipline on the part of management teams.
"There is a long-term investment opportunity in Europe. But opportunity and risk in this region are inseparable, for better or for worse. The key is identifying proven companies and constructing a portfolio best positioned to take advantage of that opportunity."
Factsheets
| Fund | English | French | German | Spanish | Italian |
|---|---|---|---|---|---|
| WS Guinness European Equity Income Fund | Download |
Updates
KIIDS
| Fund | Class | ISIN | English | French | German | Spanish | Italian | Swedish | Finnish |
|---|---|---|---|---|---|---|---|---|---|
| WS Guinness European Equity Income Fund | Y ACC | GB00BP5J6M04 | Download | ||||||
| WS Guinness European Equity Income Fund | Y INC | GB00BP5J6N11 | Download | ||||||
| WS Guinness European Equity Income Fund | F Acc | GB00BP5J6P35 | Download | ||||||
| WS Guinness European Equity Income Fund | F Inc | GB00BP5J6Q42 | Download |
Documents
Fund Facts
For information on the Fund’s current investments, please see the latest factsheet available on the literature tab above.
Will James
Share Classes
For full information on the share classes available for investment please refer to the Key Investor Information document.
Share Prices
The Funds are priced every working day at 23.00 Dublin time and updated here the following day.
| Fund Name | ISIN | Fund Price | (+/-) | Date |
|---|---|---|---|---|
| WS Guinness European Equity Income Fund Y Accumulation | GB00BP5J6M04 | 137.3200 | 0.2900 | |
| WS Guinness European Equity Income Fund Y Income | GB00BP5J6N11 | 126.0100 | 0.2700 | |
| WS Guinness European Equity Income Fund F Early Investor Accumulation GBP shares | GB00BP5J6P35 | 139.3200 | 0.3000 | |
| WS Guinness European Equity Income Fund F Early Investor Income GBP shares | GB00BP5J6Q42 | 128.0400 | 0.2700 |
Guinness European Equity Income - Webcast
MoneyWeek - AGMs: a unique selling point for investment trusts that investors should capitalise on
Shares - Choose Guinness European Equity Income for pure exposure to the region
Citywire: Guinness European Equity Income: We don’t need defence to beat the market
This is Money: Guinness European Equity Income: Forgotten fund quietly turns Europe's gems into moneymakers
Guinness European Equity Income - Webcast - Covering Q1 2025
European Equity Income - 2025 Outlook
Guinness European Equity Income - Webcast - Covering Q4 2024
Guinness European Equity Income - Webcast - Covering Q3 2024
WS Guinness European Equity Income Fund is an equity fund. Investors should be willing and able to assume the risks of equity investing. The value of an investment and the income from it can fall as well as rise as a result of market and currency movement; you may not get back the amount originally invested. For full information on the risks, please refer to the Prospectus and KIID for the Fund, which are available on our website (guinnessgi.com/literature). 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. Past performance does not predict future returns.
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 Y share class is 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.