GUINNESS EUROPEAN EQUITY INCOME: Forgotten fund turning gems into £100m moneymaker
After more than 11 years, Guinness European Equity Income is emerging from the shadows.
Having been left to lie fallow as a result of the success of its sister fund Guinness Global Equity Income, it is beginning to gain some traction with investors and wealth managers.
The fund, valued at a meagre £8 million a year ago, has now broken through £50 million. And co-fund manager Will James is confident it won't be long before it gets to £100million – maybe by the end of this year, but more likely within the next 12 months.
To put these numbers into perspective, Global Equity Income, launched three years before European Equity Income, now has £4.9 billion of assets under its wing.
'The fund has momentum,' insists James. 'It's six times bigger than it was a year ago and it's in growth mode. It's rather encouraging.'
James, who joined Nicholas Edwards on the fund in early 2024, believes one of the key drivers has been an improvement in the wider investment case for Europe.
He says: 'As an investment proposition, Europe struggled to compete with US exceptionalism for many years. The result was that most investors' portfolios were underweight in Europe.
'But that US exceptionalism has now unwound, resulting in the appeal of dividend-friendly European companies being brought to a wider investor audience.'
The fund's focus is on identifying European companies that are undervalued but which have strong balance sheets and cash flows largely impervious to the state of the economic backdrop. It side-steps businesses which have lots of debt.
All these demands reduce an investible universe from 1,400 down to 200. Like other Guinness funds, European Equity Income then builds its portfolio around just 30 stocks, with holdings having broadly equal weightings.
If a new company is brought into the fund, one has to be pushed out. The fund's exposure is determined by the companies it buys, not a view on the relative attractiveness of individual markets. This year, stakes in two businesses have been sold: Swiss-Swedish electrical engineering giant ABB and Finnish IT software company Tietoevry. They were replaced by energy technical specialist SPIE and Dutch-based BE Semiconductor Industries.
James says: 'SPIE is generating an attractive dividend, and its work is essential in improving Europe's electrical infrastructure.
'BE Semiconductor Industries is a specialist in hybrid bonding, a process which enables semiconductors to be built that are more powerful and efficient than ever before.'
Fund changes are infrequent – two holdings were sold last year, three the year before.
Eight stocks have been in the fund from the word go, including Finnish industrial company Konecranes, Norwegian fish farm specialist Salmar, London-listed Unilever and French consumer staples business Danone.
The fund's performance numbers stack up. Over the past one, three and five years it has outperformed the average for its peer group. Over five years, returns of 71 per cent compare with 56 per cent for the average European fund.
Income is paid twice yearly and it has been in growth mode since 2020. An annual dividend last year of £6.21 a share compares with £3.13 in 2020.
Later this month James and Edwards will meet financial experts in Bournemouth, Bristol and Leicester – all part of a mission to get the fund to £100 million.
Annual fund charges are reasonable at 0.89 per cent and the annual dividend is around 3.6 per cent.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
an hour ago
- Daily Mail
The exact amount of money you need for a 'moderate' retirement - so will YOU have enough? Our experts crunch the numbers and reveal how you can hit the goal at any age
Working out if you're on track for the retirement you dream of is essential to avoid running out of cash in older age. But the calculations are far from straightforward. That's why we've called on experts at investment platform AJ Bell to crunch the numbers to find out how much you need to be saving at every age to stand the best possible chance of attaining your ideal retirement.
Daily Mail
an hour ago
- Daily Mail
White House warns Downing Street against letting China build 'super embassy' near sensitive financial sites
The Oval Office has urged Downing Street against giving a Chinese embassy the green light to be built near London financial centres. Previously, proposals for the 'super-embassy' were rejected by the Conservative government amid concerns from British intelligence. However, the plans have been reintroduced following lobbying from China 's very own President Xi Jinping. But fresh warning have since emerged, as due to the Royal Mint Court's locality to a sensitive hub of essential communication cables, it poses a great risk for an attack. The suggested site is also situated between several major financial hubs in Canary Wharf and the City as well as three crucial data centres. It is understood US President Donald Trump has warned Sir Keir Starmer against giving the embassy the go-ahead. The matter is believed to have been discussed during trade talks, as Britain and its Atlantic allies discuss how they will implement a trade deal to avoid UK steel producers being lumbered with 50 percent import tariffs by July 9. According to the Times, US diplomats would be trepidatious about sharing intelligence with Britain if the embassy went ahead. A senior US official told the publication: 'The United States is deeply concerned about providing China with potential access to the sensitive communications of one of our closest allies.' It comes after a claims 'dark cabling' running beneath the proposed site 'feeds the City of London' were given in a memo to the United States' National Security Council by members of the Inter-Parliamentary Alliance on China (Ipac). John Moolenaar, the Republican head of the House of Representatives' China committee said if these reports were 'accurate' that the site would 'pose an unacceptable risk' to both the UK and US. 'The Chinese Communist Party has a clear track record of targeting critical infrastructure.' he said. 'This development would raise serious concerns in the United States and could be viewed as an act of strategic overreach by Beijing and a curious error in judgment by London.' The executive director of IPAC, Luke de Pulford dubbed the matter as a 'flashpoint' in US-UK trade talks, adding that it was 'staggering' the White House had to corroborate the cabling risk to 'defend its own financial system. 'It's time to send Xi Jinping a clear message: no matter the pressure or coercion, the UK and US won't trade away national security, and this embassy isn't happening,' he said. China has been attempting to revise plans for the Royal Mint building, which neighbour the Tower of London, since they were purchased in 2018. It is believed the Chines foreign minister, Wang Yi, brought up the matter with foreign secretary, David Lammy, while visiting London last year. According to The Times, President Xi had also discussed the same issue with the Prime Minister in a phone conversation. The proposal for the embassy, which would be China's largest in Europe, was previously rejected by Tower Hamlets council in 2022. But two weeks after Labour Chancellor Rachel Reeves came back from a visit to China earlier this year, both the council's and Scotland Yard's objections were dropped. Priti Patel, the shadow foreign secretary, described China as a 'dangerous threat to the national and economic security of our country'. She said the Conservative party continued to stand 'firmly' against the embassy proposals, stating her party would never put the UK's 'financial centre or country at risk.' Next Monday, three of Trump's aides are scheduled to meet with their Chinese peers in London for discussions in a bid to solve the current trade war between the two economic powerhouses. The Treasury secretary Scott Bessent, the commerce secretary Howard Lutnick and the trade representative Jamieson Greer will act as representatives for the US, Trump has declared on Truth Social. Yesterday, China 's foreign ministry confirmed vice-premier He Lifeng will be on British shores from June 8 until June 13, adding that talks would with the US would take place. Previously, a Chinese embassy spokesperson has quashed spy allegations, stating: 'Anti-China elements are always keen on slandering and attacking China.' A government spokesman said: 'Applications for a new Chinese embassy in Tower Hamlets have been called in for ministers to decide. A final decision will be made in due course.'
The Sun
2 hours ago
- The Sun
Fury as ‘disgusting' Cadbury cuts size of popular multipack from six bars to four but keeps price the SAME
CHOC-lovers are fuming after Cadbury reduced the size of its Dairy Milk Little Bars multipacks by a third. New packs of four are being sold for £1.40, even though packs of six cost the same last month. 1 The change has been blasted by shoppers, including many parents who bought them as kids' snacks. One fumed on the Tesco website: 'Advertised as new, only thing new is you get 4 instead of 6!! For the same price. Disgusting!' A second said: 'Stop reducing how much is in the packet and charging the same price!!!' A third added: 'Was a six pack now a four pack for the same price, a third less chocolate, unacceptable shrinkflation.' It comes after Cadbury reduced packs of Freddos from five to four and Cadbury Dairy Milk multipacks were cut from nine bars to seven. Cadbury said: 'We understand the economic pressures that consumers continue to face and any changes to our product sizes is a last resort for our business. 'However, as a food producer, we are continuing to experience significantly higher input costs across our supply chain, with ingredients such as cocoa and dairy, which are widely used in our products, costing far more than they have done previously. 'Meanwhile, other costs like energy and transport, also remain high. This means that our products continue to be much more expensive to make and while we have absorbed these costs where possible, we still face considerable challenges 'As a result of this difficult environment, we have had to make the decision to slightly reduce the weight of our Cadbury Dairy Milk Little Bars multipacks so that we can continue to provide consumers with the brands they love, without compromising on the great taste and quality they expect.' Dan Coatsworth, analyst at the investment firm AJ Bell, explained: 'The cost of producing chocolate has gone up a lot in recent years, driving up prices and prompting firms to make products smaller. We've outdone ourselves with this one' say Cadbury Ireland as they reveal new limited edition bar 'coming soon 'When production costs rocket, companies only have a limited range of options. 'They can pass on the costs to the customer through higher prices, which is difficult with a product like chocolate where people are often looking for a cheap treat. 'Another option is to reduce the size of the product in order to reduce the manufacturing cost for each bar of chocolate. Or they can try a combination of the two. 'As a last resort, companies may have to tolerate lower profit margins, especially if consumers refuse to tolerate price rises and stop buying.' The British Retail Consortium said global cocoa prices are around three times higher than in 2022, after being badly affected by poor harvests in parts of Africa.
