Asian Equity Income - February Commentary
Edmund Harriss Director, Chief Investment Officer, Portfolio Manager
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Mark Hammonds Portfolio Manager, Asian & Emerging Markets
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 January, the Guinness Asian Equity Income Fund produced a total return of 2.2% (Class Y in GBP), compared to the benchmark, the MSCI AC Pacific ex Japan Net Total Return Index, which rose 3.3%. Further performance data is shown below.
This month has been highly consequential for markets in the long term. First, Donald Trump’s arrival in office has seen a blizzard of executive orders and proposals directed both domestically and internationally, making it important for investors to understand policy priorities.
Secondly, a little-known Chinese company, DeepSeek, shocked the technology sector with its new Artificial Intelligence (AI) solution displaying performance on par with the cutting-edge US models, but (supposedly) costing just a fraction of the amount to train. We can debate how much the system really cost, but the significant message is that in the new world of AI, just as in Solar, Wind, 5G, Batteries, EVs, the Chinese have caught up. Our commentary reproduces a summary of the DeepSeek developments from the Guinness team.
Asian markets, led by developed Asia, had a stronger opening January than seemed likely before Donald Trump took office. The Fund rose during the month but underperformed the market by about 1%. Alibaba in China, a low-yielding stock, and the big Australian banks, none of which we hold, had a strong month. So too did TSMC, which we hold but in which we are structurally underweight due to our equal-weight portfolio construction.
We have been bullish for a long time on quality Asian stocks because with investor attention largely focussed on the US, these stocks have remained significantly undervalued relative to their consistent operating performance. Put another way, stocks with these profitability metrics would be trading at substantially higher price/earnings (P/E) multiples if they were listed in developed markets.
Source: Bloomberg. Data as of 31.01.2025
However, we are now also turning bullish on the Asia macro story. A region that is still a net creditor to the world, and which still has a younger workforce and an ability to combine ideas, skills and capital, has the recipe for economic growth. We think Asia is about to enter a new growth phase.
Past performance does not predict future returns
Fund launch: 19/12/2013
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.
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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 Funds are designed to provide investors with exposure to high quality dividend-paying companies in the Asia Pacific region. The Funds are managed for income and capital growth and invest in profitable companies that have generated persistently high return on capital over the last decade, and that are well placed to pay a sustainable dividend into the future. The Funds are actively managed. The Guinness Asian Equity Income Fund uses the MSCI AC Pacific ex Japan Index as a comparator benchmark only. The WS Guinness Asian Equity Income Fund uses the MSCI AC Asia Pacific ex Japan Index as a comparator benchmark only.
Guinness Asian Equity Income Fund
Documentation
The documentation needed to make an investment, including the Prospectus, Supplement, 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 under 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 is available here: https://www.waystone.com/waystone-policies/
Residency
In countries where the Fund is not registered for sale or in any other circumstances where distribution is not authorised or is unlawful, the Fund should not be distributed to resident Retail Clients. NOTE: THIS INVESTMENT IS NOT FOR SALE TO U.S. PERSONS.
Structure & Regulation
The Fund is a sub-fund 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 Fund has 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 Asian Equity Income Fund
Documentation
The documentation needed to make an investment, including the Prospectus, Supplement, 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: investorservices@linkgroup.co.uk
Waystone Fund Services (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.