Fund in Focus: Veritas Global Equity

THE INCOME INVESTOR: Veritas Global Equity is the only Gold Rated global equity income fund available to UK investors. We examine its merits

Muna Abu-Habsa 13 May, 2014 | 10:54AM
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Veritas Global Equity Income remains a topnotch offering in its sector, thanks to its focus on generating a high and growing yield without compromising capital growth. 

A major strength of this fund is its management. Charles Richardson and Andrew Headley have been at the helm since the fund was launched in 2005 and have run the institutional version since late 2003. They previously worked together at Newton; Richardson was CIO at Newton from 1993 until 2002 when he left to establish Veritas, and Headley started his career as an analyst at Newton in 1996. They also benefit from the support of an experienced team of five analysts, whose research is instrumental to this fund's por


The fund's standout characteristic is the extent to which the managers aim to deliver real returns to investors. They invest in companies with durable competitive advantages and strong, sustainable cash flows that can lead to dividend payments. Yield is one of the considerations, but the managers are not prepared to invest in high-yielding companies that are unlikely to contribute to capital growth. Finally, they also use a thematic framework to help identify industries globally that they believe will benefit from long-term structural drivers. 

The real-return focus has driven the fund to strong returns during both rising and falling markets over its lifespan thus far. For example, it fell by 9.4% in 2008, compared with 19% for its average category peer, yet it still managed to keep pace with its peers when the markets rallied in 2009. This performance pattern was repeated once more in 2011, when the managers protected investors' capital better than most, yet the fund still participated when the markets rallied in 2012, helped largely by its focus on yield, which was in market favour. 

We think this fund remains a strong choice for investors seeking a growing income from a global equity portfolio. Indeed, the consistency with which the managers have achieved the fund's returns makes it stand out amongst its peers. It retains our Gold Analyst 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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Veritas Global Equity Income A GBP243.90 GBP-0.47Rating

About Author

Muna Abu-Habsa  is a senior investment research analyst at Morningstar

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