Fund in Focus: Guinness Global Energy

This fund benefits from an outstanding team of three managers, with an unconstrained portfolio invested in oil, natural gas, coal, nuclear and alternative energy

Fatima Khizou 19 January, 2015 | 3:56PM

A highly experienced management team and prudent portfolio construction continue to make the Guinness Global Energy fund a strong choice for investors seeking exposure to the energy sector.

In our view, this fund benefits from an outstanding team of three managers: Will Riley, Jonathan Waghorn and the highly experienced energy investor Tim Guinness, who has more than 30 years’ industry experience. While we acknowledge that the current managers have not worked together for a long period of time, we have a high opinion of their expertise and depth of knowledge of the energy subsectors and their ability to navigate broader top-down developments. They also enjoy the support of a small team of dedicated energy analysts and we believe this cohesive structure has enabled them to consistently execute the investment process behind this offering.

The long-term track record indicates that the team has been successful in applying the outcome of the bottom-up, relative-value based research and top-down analysis. The broad investment approach has been consistent since the fund was launched; with top-down assessment of a large number of energy subsectors including oil, natural gas, coal, nuclear and alternative energy while stock selection is used to identify best investment ideas through a disciplined screening process. The resulting portfolio is unconstrained, equally weighted and concentrated with 30 positions under normal market conditions.

Over its lifespan to the end of December 2014, the fund has materially outpaced the Morningstar Sector Equity Energy Category but underperformed the MSCI World Energy index. However, the strategy’s longer-term performance is significantly ahead of the index and the average category peer. That said, investors should be aware that the team’s approach does lead to above-average volatility compared with both yardsticks.

The fund’s highly experienced managers and a clear and comprehensive process have served investors well over the long term. We continue to believe that this is one of the best propositions within the energy space; therefore, it retains its Silver rating.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Guinness Global Energy A7.08 USD0.02

About Author

Fatima Khizou  is an Investment Research Analyst for Morningstar