Emerging Markets Equity Income - January 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. Past performance does not predict future returns.
In 2024 the Guinness Emerging Markets Equity Income Fund produced a total return of 12.9% in GBP, while the MSCI Emerging Markets Index rose 9.4%. Over three years, the fund significantly leads the benchmark, up 18.4% versus the benchmark up 2.0%. Further performance data is shown below.
Developed markets, however, proved tough competition, with the S&P 500 rising 27% in sterling terms. Stocks with exposure to the artificial intelligence theme were among the main contributors.
China’s economy performed sluggishly as the repercussions of a weak property market continued to dampen consumer confidence and investor sentiment. A range of stimulus measures unveiled by Chinese policymakers in September caused a sharp rebound in China’s stock markets. This somewhat unwound as further details of the extent of the measures became clearer over the fourth quarter.
Latin America was weaker. Among the principal markets, Brazil was plagued by the deteriorating fiscal situation while Mexico suffered from concerns over the future trading relationship with the United States and threat of tariffs by Trump.
In this commentary we analyse the drivers of emerging market equities over the year and review the fund's performance and positioning in detail. We also report on changes to the portfolio.
Source: Guinness Global Investors. Y share class dividend growth in GBP.
The Y share class distribution in sterling terms rose by 3.0%. This increase broadly reflected where we were seeing earnings revisions this year for the portfolio.
Compared with the benchmark, we note that the distribution has recovered the previous record level set in 2022. Over this two year period the benchmark dividend per share figure is still 10% lower.
Since the launch of the fund to the full year 2024, the sterling dividend has grown at a compound annual growth rate of 6.8% per annum compared to 2.0% per annum for the benchmark.
Valuations for emerging markets continue to look reasonable, both on an absolute basis and on a relative basis compared with developed markets.
The outlook for global emerging markets contends with many diverse economies – all with their own strengths and challenges. An important factor is the impact of a Tump presidency, with the direct effects likely to be centered around the US-China relationship and the policy towards China, and also the trading relationship between the US and Mexico.
Given the multiple uncertainties that we face at this juncture, and the ability for multiple different scenarios to unfold, we believe that a focus on individual companies and their ability to sustain strong operating and financial results is now more important than ever.
We think the fund’s focus on quality, dividend-paying companies at attractive valuations will be supportive of long-term returns to shareholders.
Learn more about Guinness Emerging Markets Equity Income
Guinness Emerging Markets Equity Income
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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 Guinness Emerging Markets Equity Income Fund is designed to provide investors with exposure to high-quality dividend-paying companies in Emerging Markets worldwide. The Fund aims to provide long-term capital appreciation and a source of income that has the potential to grow over time. The Fund is actively managed and uses the MSCI Emerging Markets Index as a comparator benchmark only
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The documentation needed to make an investment, including the Prospectus, the 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, Ireland; 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.
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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.
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