Why is your fund a ‘fund to watch' and how could it work in an investor's portfolio?
The Guinness European Equity Income Fund has quintupled in AUM to £40m in the last 12 months and benefits from an expanded management team following the recruitment last year of Will James as co-manager to join Nick Edwards. Will has managed European Equity Income strategies for 14 years and was previously manager of the Premier Miton European Equity Income Fund. Combined, the team now has over 40 years' experience. Managed with a similar philosophy to the longer-running Guinness Global Equity Income Fund, the Guinness European Equity Income Fund is designed for a variety of market conditions and can act as a core regional equity income holding.
Can you give an overview of the team running the fund and your investment process?
Nick Edwards (co-manager since 2018) and Will James (co-manager since 2024) prioritise high-quality companies at attractive valuations in the search for sustainable dividend growth. By looking for unusually persistent return on capital, balance sheet strength and critical mass, they assemble a metrics-based universe of quality companies free from the noise that can surround European equities and on which they apply a disciplined prioritisation and due diligence process. To balance concentration and risk, they assemble a high-conviction portfolio of 30 broadly equally weighted stocks.
What do you see as the big opportunities and risks for your strategy?
Europe has world-leading companies with a long-established dividend culture, so it is a good hunting ground in the search for dividend and capital growth. Companies which use technology well, prioritise shareholders and have exposure to secular growth themes are well placed to capture investor attention which is increasingly turning to the diversification which Europe offers. At the same time, debates over politics and fiscal policy can create enough noise to affect market sentiment, so a focus on quality and a disciplined process is key.
Can you identify a couple of key investment opportunities you are playing at the moment in the portfolio? This could be at a stock, sector or thematic level.
We hold Kaufman & Broad, a French real estate developer of both residential and commercial property. Its management team takes a very prudent approach to capital allocation. It's a beneficiary of the structural undersupply of housing stock in France with a strong track record of delivering a high return on capital, superior cash generation and dividends to shareholders.
A recent purchase is Royal Unibrew, a Danish multi-beverage company focusing on the Nordics alongside niches in the Netherlands and Italy. It has a strong track record of capital allocation towards both organic and inorganic no/low alcohol opportunities. Its continued delivery of synergies in 2025 from recent M&A alongside deleverage and easing of raw material headwinds, and a long runway for International growth, leave it well placed.
For more information on the Guinness European Equity Income Fund, call our sales team on 02072225703 or visit guinnessgi.com.
