Guinness Global Equity Income Fund Portfolio Managers Dr Ian - - PowerPoint PPT Presentation

SLIDE 1

Portfolio Managers Dr Ian Mortimer, CFA Matthew Page, CFA Q3 2018, EUR

Guinness Global Equity Income Fund

This document is presented to you in your capacity as a Professional Client and is not for general distribution to Retail Clients. Should you receive this document as a Retail Client you should disregard its content and take no action based upon it.

SLIDE 2

SLIDE 3

2

• High conviction, long only equities
• Founded in 2003, headquartered in London
• €1.5bn AUM (Guinness Group assets)
• UCITS, US Mutual Funds, Separately Managed

accounts

• 25 employees
• 100% employee-owned (all investment managers
• wn equity in business)
• Investment strategies
• Global Equity
• Energy
• Asia

Guinness Asset Management

Source: Guinness Asset Management

SLIDE 4

3

Global equity strategies from Guinness

Source: Guinness Asset Management. Guinness Atkinson Asset Management. Financial Express (30.06.2018).

Global Innovators

Global growth Managers: Analysts: Matthew Page, Ian Mortimer Sagar Thanki Strategy AUM: €370mn

Global Equity Income

Quality, value, and dividend growth Managers: Analysts: Matthew Page, Ian Mortimer Sagar Thanki Strategy AUM: €450mn

2 UCITS Fund (GUGLEIE ID) in

IA Global Equity Income sector

Performance vs peers2:

Rank YTD 10 / 54 1 year 20 / 54 3 years 9 / 46 5 years 16 / 38 Since launch* 6 / 22

Performance vs peers2:

Rank YTD 116/ 294 1 year 46/ 281 3 years 20 / 255 5 years 11 / 227 10 years 2 / 156

2 UCITS Fund (launched on 31.10.2014)

in IA Global sector. Returns are a simulation based on the actual returns

• f a sister mutual fund for US

investors, until the launch of the UCITS

• version. Both funds are managed in

accordance with the same investment process and with the same portfolios.

SLIDE 5

4

AUM growth in Guinness global equity strategies

Source: Guinness Asset Management, Guinness Atkinson Asset Management (30.06.2018)

100 200 300 400 500 600 700 800 900 2011 2012 2013 2014 2015 2016 2017 Jun-18 EUR(m) AUM Global Equity Income strategy Global Innovators strategy

SLIDE 6

5

Matthew Page, CFA Portfolio Manager

• Joined Guinness Asset Management in 2005
• Previously worked for Goldman Sachs as an analyst in

Fixed Income Currencies and Commodities (FICC)

• Graduated from University of Oxford, with a Masters

degree in Physics in 2004

• Manager of Global Equity Income strategy since launch
• Manager of Global Innovators strategy since 2010

Portfolio managers

Source: Guinness Asset Management

Dr Ian Mortimer, CFA Portfolio Manager

• Joined Guinness Asset Management in 2006
• Graduated from University of Oxford, with a D.Phil. in

Physics in 2006

• Graduated from University College London, University of

London, with a Masters degree in Physics in 2003

• Manager of Global Equity Income strategy since launch
• Manager of Global Innovators strategy since 2011

Global Innovators 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tim Guinness Manager Matthew Page

• Analyst

Manager Ian Mortimer

• Analyst

Manager Sagar Thanki

• Analyst

Global Equity Income 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Matthew Page

• Manager

Ian Mortimer

• Manager

Sagar Thanki

• Analyst

SLIDE 7

IA Global Equity Income sector

% total return in EUR, data as at: 30/06/2018

Year to date 1 year 3 years 5 Years From launch (31.12.10)

Morgan Stanley Global Brands Equity Income 4.49 Schroder Global Equity Income 12.17 Newton Global Income 25.47 Schroder Global Equity Income 82.22 Artemis Global Income 137.89 Schroder Global Equity Income 3.24 Old Mutual Global Equity Income (IRL) 10.95 Quilter Investors Global Equity Value 24.89 Artemis Global Income 79.46 Schroder Global Equity Income 124.66 Mirabaud Global Equity High Income 3.16 Mirabaud Global Equity High Income 10.83 Schroder Global Equity Income 23.85

• T. Bailey Fund Srvs Ltd (ACD) Aptus Global Fin

76.75 Invesco Perpetual Global Equity Income 124.34 TB Evenlode Global Income 2.89 Oldfield The TM Overstone UCITS Equity Incom 9.79 Baillie Gifford Global Income Growth 19.18 Newton Global Income 70.64 Newton Global Income 116.26 Quilter Investors Global Equity Value 2.55 M&G Global Dividend I Acc GBP 8.30 M&G Global Dividend I Acc GBP 18.77 Quilter Investors Global Equity Value 69.23 Guinness Global Equity Income 111.05 Oldfield The TM Overstone UCITS Equity Incom 2.47 Aviva Inv Global Equity Income 8.26 Kames Global Equity Income 18.67 Aviva Inv Global Equity Income 68.84 M&G Global Dividend I Acc GBP 102.33 Newton Global Income 2.38 Neptune Global Income 8.06 Investec Global Dividend 18.18 Oldfield The TM Overstone UCITS Equity Incom 68.49 Baillie Gifford Global Income Growth 96.34 Aviva Inv Global Equity Income 2.26 Artemis Global Income 7.88 JPM Global Equity Income 17.80 Baillie Gifford Global Income Growth 67.17 Aviva Inv Global Equity Income 94.74 Investec Global Dividend 2.21 Artemis Global Equity Income 7.53 Guinness Global Equity Income 16.49 Fidelity Global Dividend 64.61 Legg Mason IF ClearBridge Global Equity Inco 93.43 Guinness Global Equity Income 2.04 JPM Global Equity Income 7.48 Aviva Inv Global Equity Income 15.77 Sarasin Global Higher Dividend 64.58 Sarasin Global Higher Dividend 93.12 Old Mutual Global Equity Income (IRL) 1.86 Investec Global Dividend 6.68 Oldfield The TM Overstone UCITS Equity Incom 15.73 Janus Henderson Global Equity Income 63.94 Liontrust Global Income 85.63 Artemis Global Income 1.78

• T. Bailey Fund Srvs Ltd (ACD) Aptus Global Fin

6.11 Fidelity Global Dividend 15.68 JPM Global Equity Income 63.23 Threadneedle Global Equity Income 84.42 JPM Global Equity Income 1.72 Kames Global Equity Income 5.98 Sarasin Global Dividend 14.86 Kames Global Equity Income 62.98 Sector : IA Global Equity Income 83.12 Artemis Global Equity Income 1.63 Invesco Perpetual Global Equity Income 5.88 Fidelity Global Enhanced Income 14.73 Invesco Perpetual Global Equity Income 62.59 Legg Mason IF Martin Currie Global Equity In 79.57 Liontrust Global Income 1.37 Sarasin Global Dividend (Sterling Hedged) 5.52 Janus Henderson Global Equity Income 13.96 Guinness Global Equity Income 60.85 Davy Global Equity Income 78.10 Fidelity Global Dividend 1.33 Morgan Stanley Global Brands Equity Income 5.51 Sarasin Global Higher Dividend 13.84 Legg Mason IF ClearBridge Global Equity Inco 59.20 Sarasin Global Higher Dividend (Sterling Hed 68.47 Investec Global Quality Equity Income 1.27 Liontrust Global Income 5.25 Invesco Perpetual Global Equity Income 13.15 GAM Multistock Global Equity Income 58.52 Veritas Global Equity Income 66.61 Fidelity Global Enhanced Income 1.05 Baillie Gifford Global Income Growth 4.99 LF Canlife Global Equity Income 12.50 M&G Global Dividend I Acc GBP 56.36 Amundi SICAV II Global Equity Target Income 66.19 Neptune Global Income 0.95 Sarasin Global Dividend 4.89 Artemis Global Income 12.48 TB Saracen Global Income & Growth 54.46 Pictet High Dividend Selection 64.69 Invesco Perpetual Global Equity Income 0.83 Vanguard Global Equity Income 4.87 BlackRock Global Income 12.48 LF Canlife Global Equity Income 54.16 GAM Multistock Global Equity Income 64.54 Vanguard Global Equity Income 0.62 Guinness Global Equity Income 4.53 Threadneedle Global Equity Income 12.04 Standard Life Investments Global Equity Inco 53.99 Lazard Global Equity Income 60.67 Sarasin Global Dividend 0.50 HSBC Global Equity Income 4.43 TB Saracen Global Income & Growth 11.55 BlackRock Global Income 53.57 Premier Global Infrastructure Income 24.21 Veritas Global Equity Income 0.45 GAM Multistock Global Equity Income 4.38 Mirabaud Global Equity High Income 11.08 Jupiter Global Equity Income 50.81 Baillie Gifford Global Income Growth 0.36 Quilter Investors Global Equity Value 3.82 Artemis Global Equity Income 11.07 Sector : IA Global Equity Income 49.91 M&G Global Dividend I Acc GBP 0.14 Newton Global Income 3.71 Veritas Global Equity Income 10.72 Threadneedle Global Equity Income 49.46 Janus Henderson Global Equity Income 0.06 Janus Henderson Global Equity Income 3.68 Jupiter Global Equity Income 10.24 Liontrust Global Income 48.53 Architas Global Equity Income

• 0.01

Barclays GlobalAccess Global Equity Income 3.53 Legg Mason IF Martin Currie Global Equity In 9.28 Epoch Global Equity Shareholder Yield 47.91 LF Canlife Global Equity Income

• 0.04

Sector : IA Global Equity Income 2.84 Epoch Global Equity Shareholder Yield 9.09 Premier Global Infrastructure Income 47.66 GAM Multistock Global Equity Income

• 0.28

Sarasin Global Higher Dividend (Sterling Hed 2.84 Pictet High Dividend Selection 8.58 Amundi SICAV II Global Equity Target Income 46.77 HSBC Global Equity Income

• 0.28

LF Canlife Global Equity Income 2.81

• T. Bailey Fund Srvs Ltd (ACD) Aptus Global Fin

8.47 Sarasin Global Higher Dividend (Sterling Hed 45.14 Sector : IA Global Equity Income

• 0.49

Legg Mason IF Martin Currie Global Equity In 2.74 Sector : IA Global Equity Income 8.40 Davy Global Equity Income 44.58 Kames Global Equity Income

• 0.60

Sarasin Global Higher Dividend 2.36 Liontrust Global Income 8.12 Veritas Global Equity Income 40.28 Sarasin Global Higher Dividend

• 0.79

Troy Asset Management Ltd Trojan Global In 1.91 GAM Multistock Global Equity Income 7.16 Legg Mason IF Martin Currie Global Equity In 40.11 Pictet High Dividend Selection

• 0.84

Jupiter Global Equity Income 1.58 Davy Global Equity Income 7.12 Pictet High Dividend Selection 37.65 Troy Asset Management Ltd Trojan Global In

• 0.86

TB Saracen Global Income & Growth 1.55 Legg Mason IF ClearBridge Global Equity Inco 6.75 Neptune Global Income 36.48 Legg Mason IF RARE Global Infrastructure Inc

• 0.99

Amundi SICAV II Global Equity Target Income 1.37 Standard Life Investments Global Equity Inco 6.38 Lazard Global Equity Income 34.52 Amundi SICAV II Global Equity Target Income

• 1.01

Lazard Global Equity Income 1.23 Amundi SICAV II Global Equity Target Income 6.37 Barclays GlobalAccess Global Equity Income 29.66 Legg Mason IF Martin Currie Global Equity In

• 1.01

Threadneedle Global Equity Income 1.15 Aberdeen World Equity Income 1.99 Davy Defensive Equity Income 20.51 Lazard Global Equity Income

• 1.03

Fidelity Global Dividend 0.94 Lazard Global Equity Income 1.60 Aberdeen World Equity Income 17.67 LF Miton Global Infrastructure Income

• 1.09

Courtiers Global (ex UK) Equity Income 0.88 Premier Global Infrastructure Income 1.25 TB Saracen Global Income & Growth

• 1.34

UBS Global Enhanced Equity Income 0.66 Lazard Global Equity Income

• 0.12

Sarasin Global Dividend (Sterling Hedged)

• 1.36

Fidelity Global Enhanced Income 0.44 Davy Defensive Equity Income

• 0.35
• T. Bailey Fund Srvs Ltd (ACD) Aptus Global Fin
• 1.58

Investec Global Quality Equity Income 0.29 Sarasin Global Dividend (Sterling Hedged)

• 2.48

Threadneedle Global Equity Income

• 1.61

Lazard Global Equity Income 0.17 Sarasin Global Higher Dividend (Sterling Hed

• 4.45

Lazard Global Equity Income

• 1.64

Pictet High Dividend Selection

• 0.03

UBS Global Enhanced Equity Income

• 5.60

Courtiers Global (ex UK) Equity Income

• 1.66

Standard Life Investments Global Equity Inco

• 0.23

Neptune Global Income

• 5.72

Standard Life Investments Global Equity Inco

• 1.74

Davy Global Equity Income

• 0.31

Barclays GlobalAccess Global Equity Income

• 8.60

Epoch Global Equity Shareholder Yield

• 2.17

Legg Mason IF ClearBridge Global Equity Inco

• 0.35

Jupiter Global Equity Income

• 2.27

Epoch Global Equity Shareholder Yield

• 0.69

Davy Global Equity Income

• 2.28

Aberdeen World Equity Income

• 1.32

Sarasin Global Higher Dividend (Sterling Hed

• 2.52

Veritas Global Equity Income

• 2.27

Davy Defensive Equity Income

• 2.57

Davy Defensive Equity Income

• 2.54

UBS Global Enhanced Equity Income

• 3.42

LF Miton Global Infrastructure Income

• 3.71

Barclays GlobalAccess Global Equity Income

• 3.73

BlackRock Global Income

• 3.86

Legg Mason IF ClearBridge Global Equity Inco

• 3.85

Legg Mason IF RARE Global Infrastructure Inc

• 5.50

BlackRock Global Income

• 4.02

Premier Global Infrastructure Income

• 6.23

Aberdeen World Equity Income

• 6.12

Premier Global Infrastructure Income

• 6.93

MSCI World Index 3.63 MSCI World Index 9.11 MSCI World Index 23.92 MSCI World Index 83.84 MSCI World Index 128.47

Performance vs peers

6

Source: Financial Express, Y Class (0.99% OCF), IA Global Equity Income sector

SLIDE 8

Dividend distribution history

7

Source: Guinness Asset Management

Imputed income generated by investing £1,000 at launch (31/12/2010) and switching into lower OCF share class when introduced on first ex- dividend date

2.8%

▪ Grown fund dividend payment every year ▪ Annualised growth of 4.7% over 7 years ▪ Current expected growth for 2018 dividend 2-4%

SLIDE 9

Guinness Global Equity Income Fund philosophy

8 Conviction

The Fund typically has 35 equally weighted positions We target a low turnover with average of 3 – 5 year investment horizon

Quality

We focus on companies with a long history of persistent high return on capital We avoid highly leveraged companies

Value

We try to identify companies that are cheap vs market, peers, and their own history Fund investment process is fundamentally driven from the bottom-up

Dividends

The Fund targets a moderate dividend yield (we do not screen for high dividend yield companies) The Fund aims to grow the dividend stream year-

• n-year

Concentrated portfolio of good quality companies, at attractive valuations, with a moderate dividend yield and good potential for dividend growth

SLIDE 10

Investment universe criteria

9

▪ Our universe definition ignores yield - our focus is on quality, stable, profitable companies

All globally listed companies

c.16,000

Persistent high CFROI companies

c.600

Investment universe of high quality companies

c.500 1

Sustainable competitive advantage Screened for 10 years of CFROI greater than 10%

2

Strong balance sheet and critical mass Debt to equity < 1. Market cap > $1bn.

Source: Guinness Asset Management

SLIDE 11

Why CFROI > 10%?

10

▪ A CFROI >10% puts that company in the top quartile for that year. ▪ 10% is well above the average real cost of capital in the HOLT model (5-7% in the last decade).

Source: Guinness Asset Management, CS HOLT

▪ Cash flow return on investment (CFROI) is a metric developed by Credit Suisse HOLT that seeks to calculate cash flow return on investment adjusted for inflation and on a standardised global/industry basis.

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 CFR OI

CFR OI quartile distribution for all listed companies globally

Upper quartile Median Lower quartile

SLIDE 12

Why 10 years, and why 10 consecutive years?

11

US business cycles 1854-2009 ▪ Ensures we only capture companies whose returns have remained consistently high through recessionary periods ▪ Looking at 10 consecutive years avoids companies with highly cyclical returns on capital ▪ Looking at 10 consecutive years rather than an average avoids companies with high average but low current CFROI

Source: NBER

Leng ngth h of cycl cle Occur currence nces > 10 years 1 8-10 years 3 6-8 years 4 4-6 years 6 2-4 years 19 19 Total l no. of cycl cles 33 33

All but one US business cycle since 1854 has lasted less than 10 years

SLIDE 13

12

Identifying consistent creators of shareholder value

Our universe includes companies like this… …but excludes companies like these

Source: Guinness Asset Management, CS HOLT

Value destruction

2 4 6 8 10 12 14

CFROI Time Value creation

2 4 6 8 10 12 14

CFROI Time

Value creation 2 4 6 8 10 12 14 CFROI Time

6% cost of capital 6% cost of capital 6% cost of capital

CFROI >10% for 10 years is a powerful indicator of continuing high returns: there is a 95% chance that qualifying companies will achieve it again the following year, and an 80% chance they will still be achieving it after four years Good company Average company Poor company

Powerful indicator

SLIDE 14

Other universe selection criteria

13

Balance sheet strength

Debt to equity <1

• Avoid companies with large amounts of debt
• Prefer companies that have financed growth without excessive external

debt financing

• We want to invest in companies whose priority is to return cash to

shareholders rather than using it to de-lever their balance sheet

Critical mass

Market capitalisation > $1 billion

• Avoid higher risk small cap. companies
• Greater business diversification
• More mature companies with good liquidity

Investment universe of c. 500 quality companies

Source: Guinness Asset Management

SLIDE 15

Universe performance (2000 to 2017)

14

Log graph of the performance of the whole Guinness Global Quality Universe, and the universe after applying a 2% yield threshold

The performance of the Universe is based on an annual screen of globally listed companies back to 2000 to deliver an annual index of companies which generate consistently high returns on capital (our CFROI Global Quality Universe). The graph shows the performance of a simple strategy of buying all companies in the universe each year, and is based on an equally weighted portfolio, total return with quarterly rebalancing, and does not include the costs of dealing. Total return in USD. The performance of the Guinness Global Quality Universe is not indicative of the future performance of the Guinness Global Equity Income Fund. The value of investments and the income from them can fall as well as rise. Source: Bloomberg, Guinness Asset Management

Over the long-term: ▪ Quality companies

• utperform

▪ Dividend-paying companies outperform But... ▪ Screening for yield can potentially lead to large drawdowns Our approach: ▪ Focus on underlying business quality first, then think about dividends

SLIDE 16

Universe characteristics – sector and market cap. distribution

15

Source: Guinness Asset Management, CS HOLT, Bloomberg

▪

Well diversified and stable distribution across sectors

▪

No sector dominates our investible universe

▪

Good distribution across market cap. spectrum

▪

More than 60% companies in $1 – 10bn range

SLIDE 17

Universe characteristics – geographic and dividend yield distributions

16

Source: Guinness Asset Management, CS HOLT, Bloomberg

▪

North America domination diminishing over time

▪

Growing weighting towards emerging markets (Asia Pacific in particular)

▪

Universe today has a high proportion (~50%) of companies with yields greater than 2%

SLIDE 18

Universe characteristics – example companies

17

▪ Includes blue chips you might expect… …but also plenty of companies you might not ▪ Some of these companies will be correctly priced by the market but often the market can value these companies as if they were just ‘average’ mean-reverting companies – this is the market anomaly we are trying to capture

Source: Guinness Asset Management

SLIDE 19

18

Investment process: systematic, repeatable, robust

Improvin ing retur urn n on capita ital l profil ile busin inesses

Investment universe of ~500 persistently high return on capital businesses Prioritisation / Idea generation

Business strength, Valuation, Dividend

Portfolio addition

Discount to intrinsic value, sustainable dividend, better risk/return than a current holding

Fundamental analysis

Proprietary modelling, Assessment of return potential, Risk analysis, Competitive advantage, Market sentiment

Watch list

Like the business, don’t like the valuation

Reject

Weak business, poor allocator of capital, industry in decline, unsustainable dividend

Understand performance

Did total return evolve as expected?

Source: Guinness Asset Management

SLIDE 20

19

Prioritizing companies for further due diligence

5yr average CFROI* > cost

• f capital

Year-on-year improvements in CFROI*

• ver last 3 years

Market expectation of continued strong CFROI in future

Business strength

Market implied value < intrinsic value Multiples:

• discount vs peers
• greater than 1s.d. vs

company 10yr average

• discount vs broad market

Valuation

Above market dividend yield Good history of paying dividend Prospect for sustainable dividend growth in future

Dividend

* CFROI = Cash Flow Return On Investment (our preferred metric for return on capital)

Source: Guinness Asset Management

▪ We screen our investment universe bi-monthly to highlight companies that have the characteristics we seek

SLIDE 21

Fundamental analysis – proprietary company modelling and due diligence

20

Source: Guinness Asset Management

▪ Understand the business model ▪ Understand the risks ▪ Understand the dividend ▪ Analyse valuation relative to peers and history ▪ Understand industry trends ▪ Investigate company-specific issues ▪ Analyse market sentiment towards the company

Financial model Qualitative assessment

SLIDE 22

21

Portfolio construction

Holdings & sizing

▪ 35 companies in portfolio (typically) ▪ Equally weighted

▪ Rebalancing effect: Trim winners, top up underperformers ▪ One in, one out: Strong sell discipline, no long tail of small positions ▪ Limit stock specific risk: No large weights in just one or two positions ▪ High active share: Genuinely index agnostic

▪ Maximum 30% in any one sector ▪ Maximum 20% directly invested in emerging markets

Diversification

▪ Low turnover of positions ▪ 3 – 5 year average holding period

Turnover

▪ Fundamentally driven stock selection – index agnostic ▪ Consider macro factors at the company level

Macro/Top-down

Source: Guinness Asset Management

SLIDE 23

Monitoring - sell discipline

22

Source: Guinness Asset Management

Quality

• 1. Company falls out of our universe
• 2. Balance sheet becomes stretched

Value

• 3. Company no longer offering compelling

upside / valuation becomes too rich

Dividend

• 4. Dividend outlook or policy unfavourable
• 5. Yield contribution to portfolio insufficient

Conviction

• 6. Original reason for purchase no longer holds
• 7. New idea more compelling

Example sales

• 1. Sanofi
• 2. PepsiCo
• 3. Northrop Grumman
• 4. Metcash
• 5. Largan Precision
• 6. Alten
• 7. Wadell and Reed

SLIDE 24

Portfolio breakdown

23

Source: Guinness Asset Management, Bloomberg (data as at 30.06.2018) By receipt of this presentation document in either hard or soft copy, the recipient agrees not to copy, disclose, disseminate or use this information other than in their own fund selection process. Note: this portfolio data is Confidential Information that, until the 15th day of each month, is not in the public domain.

PE PE 18Y 19Y WPP PLC Consumer Discretionary 19.5 GB 3.2% 9.2 8.8 ANTA Sports Products Ltd Consumer Discretionary 13.9 CN 2.8% 22.8 18.9 VF Corp Consumer Discretionary 32.2 US 2.6% 23.6 21.2 British American Tobacco PLC Consumer Staples 117.5 GB 3.9% 13.3 12.3 Japan Tobacco Inc Consumer Staples 54.5 JP 3.7% 13.2 12.3 Reckitt Benckiser Group PLC Consumer Staples 59.0 GB 3.0% 17.6 16.2 Procter & Gamble Co/The Consumer Staples 196.5 US 2.9% 18.7 17.3 Walmart Inc Consumer Staples 247.9 US 2.9% 19.9 17.8 Danone SA Consumer Staples 51.0 FR 2.8% 17.1 15.6 Hengan International Group Co Ltd Consumer Staples 11.3 CN 2.8% 17.4 16.0 Unilever PLC Consumer Staples 162.4 GB 2.8% 19.1 17.5 Imperial Brands PLC Consumer Staples 36.1 GB 2.4% 9.0 8.7 Royal Dutch Shell PLC Energy 290.8 NL 2.6% 13.2 12.2 Deutsche Boerse AG Financials 26.0 DE 2.9% 20.2 18.0 NEX Group PLC Financials 5.2 GB 2.8% 38.6 28.2 CME Group Inc Financials 55.8 US 2.7% 24.6 23.0 Arthur J Gallagher & Co Financials 11.9 US 2.7% 19.0 17.1 Aflac Inc Financials 33.2 US 2.6% 11.3 10.8 Johnson & Johnson Health Care 326.1 US 2.9% 15.7 14.9 Roche Holding AG Health Care 193.3 CH 2.9% 13.1 12.7 Novo Nordisk A/S Health Care 116.3 DK 2.9% 18.4 17.7 Sonic Healthcare Ltd Health Care 7.8 AU 2.7% 20.5 19.0 AbbVie Inc Health Care 147.8 US 2.7% 12.5 10.7 Merck & Co Inc Health Care 162.7 US 2.4% 13.0 12.3 Randstad NV Industrials 10.8 NL 3.0% 12.0 11.2 Illinois Tool Works Inc Industrials 47.0 US 2.9% 20.3 18.6 Eaton Corp PLC Industrials 32.8 US 2.8% 15.3 14.0 United Technologies Corp Industrials 100.0 US 2.7% 17.7 15.9 BAE Systems PLC Industrials 27.1 GB 2.7% 13.0 12.1 Schneider Electric SE Industrials 47.6 FR 2.5% 15.6 14.3 Taiwan Semiconductor Manufacturing Co Information Technology 182.0 TW 3.2% 16.2 14.4 Cisco Systems Inc Information Technology 201.3 US 2.7% 16.4 14.8 CA Inc Information Technology 15.2 US 2.6% 13.0 12.4 Microsoft Corp Information Technology 768.4 US 2.5% 24.8 23.1 Vodacom Group Ltd Telecommunication Services 15.4 ZA 3.8% 16.0 14.7 Average mkt. cap 114.4 Total portfolio 15.7 14.5 Median mkt. cap 51.0 MSCI World Index 15.8 14.5 Fund premium/(discount)

• 0.6%

0.1% Name Sector

• Mkt. cap

Country of domicile % NAV

SLIDE 25

Portfolio allocation since launch

24

Source: Guinness Asset Management, Bloomberg (data as at 30.06.2018)

Sector allocation Geographic allocation

SLIDE 26

Geographic exposure

25

Source: Guinness Asset Management, Bloomberg (data as at 30.06.2018)

SLIDE 27

Fund MSCI World Average 10yr CFROI 18% 8% Weighted average net debt / equity 56% 66%

Conviction

Typically 35 equally weighted positions in the portfolio Low turnover: average 3 – 5 year investment horizon

Quality

Focus on companies with a long history of persistent high return on capital Avoid highly leveraged companies

Value

Identify companies that are cheap vs market, peers, or their own history Fundamentally driven bottom-up process

Dividend

Target a moderate dividend yield (do not screen for high dividend yield companies) Aim to grow the dividend stream year-on-year

Positions 35 Top 10 %NAV Bottom 10 %NAV 33% 26% Active share 93% Average yearly position turnover 5 Fund MSCI World P/E (2018e) 15.7 15.8 FCF Yield 5.6% 4.3% Fund MSCI World Dividend yield (LTM) 2.7% 2.4% Weighted average payout ratio 49% 49%

26

Portfolio statistics – are we doing what we say we will do?

Source: Guinness Asset Management, Bloomberg, CS HOLT (data as at 30.06.2018)

SLIDE 28

Fund cumulative total return since launch (in EUR)

27

Y Class shares (0.99% OCF), bid to bid basis, total return, 31.12.2010 to 30.06.2018. Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise. Source: Financial Express

• 80%
• 60%
• 40%
• 20%

0% 20% 40% 60% 80% 100% 120% 140%

Guinness - Global Equity Income Y Acc EUR GTR in EU MSCI World Index IA Global Equity Income GTR in EU

5.4 8.7 23.2 18.0 7.7 9.6 5.4 2.0

• 1.8

14.8 21.9 20.1 11.0 11.4 8.1 3.6 0.5 13.0 17.4 14.4 6.9 6.4 6.1

• 0.5

2011 2012 2013 2014 2015 2016 2017 2018

128.5% 111.4% 83.1%

SLIDE 29

28

Largest drawdowns in global equity markets in each year since 2011

Source: Guinness Asset Management, Bloomberg

1 2 3 4 5 6 7

SLIDE 30

29

Performance of fund vs benchmark in the largest drawdowns

Source: Guinness Asset Management, Bloomberg (all data total return in USD, 1.24% OCF) Start date End date Guinness Global Equity Income MSCI World Index Fund relative performance Reason for sell off 02/05/2011 04/10/2011

• 15.6%
• 21.8%

6.1% European crisis / Greece 19/03/2012 04/06/2012

• 8.9%
• 12.3%

3.4% US credit rating downgrade 21/05/2013 24/06/2013

• 5.2%
• 7.7%

2.4% "Taper tantrum" 27/08/2014 16/10/2014

• 8.3%
• 8.8%

0.4% Oil price sell off 17/08/2015 25/08/2015

• 8.5%
• 9.4%

0.9% Chinese stock market decline 31/12/2015 11/02/2016

• 6.1%
• 11.5%

5.4% China growth concerns 26/01/2018 08/02/2018

• 7.1%
• 9.0%

2.0% Volatility spike / inflation concerns

1 2 3 4 5 6 7

Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise.

Fund outperformed in all of the largest drawdowns in each of the last 7 years

SLIDE 31

30

Performance of fund vs benchmark in 10%+ corrections

Source: Guinness Asset Management, Bloomberg (all data total return in USD, 1.24% OCF) Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise.

Start date End date Guinness Global Equity Income MSCI World Index Fund relative performance Reason for sell off Downside capture 02/05/2011 04/10/2011

• 15.6%
• 21.8%

6.1% European crisis / Greece 72% 19/03/2012 04/06/2012

• 8.9%
• 12.3%

3.4% US credit rating downgrade 73% 31/12/2015 11/02/2016

• 6.1%
• 11.5%

5.4% China growth concerns 53%

Average: 66%

1 2 6

Fund captured only 66% of market downside on average in the 3 corrections (>10% drawdown) seen since fund launched at the end of 2010

SLIDE 32

< -4%

• 4% to -2%
• 2% to 2%

2% to 4% > 4% Guinness Global Equity Income

• 5.4%
• 2.0%

0.2% 2.4% 4.9% MSCI World Index

• 6.3%
• 2.9%

0.2% 3.0% 5.2% Difference 0.9% 0.9% 0.0%

• 0.6%
• 0.2%

Frequency 4 8 45 21 12

• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% Average Monthly GTR (EUR) Index Gross Total Return Range (EUR)

Guinness Global Equity Income MSCI World Index

Fund monthly absolute total return since launch (in EUR)

31

Y Class shares (0.99% OCF), bid to bid basis, monthly total return. Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise. Source: Financial Express (data as at 30.06.2018)

Monthly returns frequency table grouped by index return ranges

SLIDE 33

Peer group analysis – fund percentile rank versus peers

32

Source: Financial Express Y Class shares (0.99% OCF), annualised weekly performance, 31.12.10 to 30.06.2018. Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise.

IA Global Equity Income sector, plus M&G Global Dividend Fund.

Risk and performance analysis

Annualised, weekly, in GBP

Return pa (%) Volatility (%) Downside Risk Max drawdown Sortino Excess return Sharpe ratio Info ratio Treynor Jensens Alpha

Guinness Global Equity Income Fund 10.47 13.09 13.94

• 16.80

0.46

• 1.17

0.49

• 0.24

7.32

• 0.25

MSCI World Index 11.64 14.05 15.13

• 20.16

0.50 0.00 0.54 0.00 7.64 0.00 IA Global Equity Income sector 8.40 12.64 13.21

• 20.43

0.34

• 3.17

0.35

• 0.46

5.52

• 1.54

10 20 30 40 50 60 70 80 90 100

FUND PERCENTILE RANK in peer group

SLIDE 34

Peer group analysis

33

Source: Financial Express *IA Global Equity Income sector Y Class shares (0.99% OCF), bid to bid basis, monthly total return 31.12.2010 to 30.06.2017. Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise.

1st quartile 4th quartile

Risk and performance analysis

Annualised, weekly, in EUR

Return pa (%) Volatility (%) Downside Risk Max drawdown Sortino Excess return Sharpe ratio Info ratio Treynor Jensens Alpha MSCI World Index 11.64 14.05 15.13

• 20.16

0.50 0.00 0.54 0.00 7.64 0.00 Global Equity Income sector* 8.40 12.64 13.21

• 20.43

0.34

• 3.17

0.35

• 0.46

5.52

• 1.54

Artemis Global Income 12.25 14.43 14.77

• 22.75

0.57 0.78 0.58 0.09 9.48 1.67 Schroder Global Equity Income 11.39 14.44 14.41

• 23.55

0.52

• 0.21

0.51

• 0.03

8.27 0.69 Invesco Perpetual Global Equity Income 11.37 13.70 14.14

• 21.49

0.52

• 0.23

0.54

• 0.03

8.67 0.92 Newton Global Income 10.83 11.89 11.88

• 12.70

0.57

• 0.82

0.57

• 0.10

9.58 1.32 Guinness Global Equity Income 10.47 13.09 13.94

• 16.80

0.46

• 1.17

0.49

• 0.24

7.32

• 0.25

Baillie Gifford Global Income Growth 9.41 13.01 13.16

• 16.41

0.42

• 2.15

0.42

• 0.25

7.04

• 0.32

Aviva Inv Global Equity Income 9.29 14.94 15.58

• 21.76

0.34

• 2.37

0.35

• 0.28

5.72

• 1.39

Legg Mason IF ClearBridge Global Equity Income 9.19 13.25 14.31

• 25.60

0.37

• 2.41

0.39

• 0.31

6.39

• 0.83

Sarasin Global Higher Dividend 9.17 12.83 13.25

• 19.76

0.40

• 2.40

0.41

• 0.32

6.54

• 0.74

Liontrust Global Income 8.60 13.62 14.18

• 23.58

0.32

• 3.16

0.33

• 0.36

5.52

• 1.41

Threadneedle Global Equity Income 8.50 13.26 13.84

• 17.97

0.33

• 3.09

0.34

• 0.41

5.48

• 1.55

Legg Mason IF Martin Currie Global Equity Income 8.12 12.65 13.17

• 20.40

0.33

• 3.36

0.34

• 0.44

5.43

• 1.53

Davy Global Equity Income 8.00 14.09 15.31

• 17.68

0.30

• 3.09

0.32

• 0.53

4.87

• 2.25

Sarasin Global Higher Dividend (Sterling Hedged) 7.20 14.24 14.98

• 22.75

0.22

• 4.38

0.23

• 0.45

3.97

• 2.52

Veritas Global Equity Income 7.04 13.74 13.85

• 24.32

0.22

• 4.65

0.22

• 0.53

3.65

• 2.81

Amundi SICAV II Global Equity Target Income 7.01 13.44 14.90

• 23.48

0.20

• 4.64

0.22

• 1.42

3.20

• 3.76

Pictet High Dividend Selection 6.88 12.20 13.42

• 15.51

0.24

• 4.43

0.26

• 0.71

4.03

• 2.63

GAM Multistock Global Equity Income 6.86 14.02 15.34

• 22.46

0.19

• 4.79

0.20

• 1.26

2.95

• 4.07

Lazard Global Equity Income 6.52 14.43 14.64

• 31.19

0.18

• 5.00

0.18

• 0.59

3.00

• 3.52

Premier Global Infrastructure Income 2.93 12.52 13.35

• 33.41
• 0.08
• 8.76

0.00

• 0.85
• 1.65
• 5.66

SLIDE 35

Peer group analysis

34

Source: Financial Express Y Class shares (0.99% OCF), bid to bid basis, annualised total return 31.12.2010 to 30.06.2018. Past performance should not be taken as an indicator of future performance. The value of investments and the income from them can fall as well as rise.

Guinness Global Equity Income MSCI World Index IA sector average

6 7 8 9 10 11 12 13 14 12 13 14 15 16

Total return (annualised) Volatility (annualised)

SLIDE 36

35

Key facts: Guinness Global Equity Income Fund

Source: Guinness Asset Management

The Fund Structure & legal Pricing & dealing

Fund launch date

31 December 2010

Domicile

Ireland

Pricing

Daily

Fund managers

Matthew Page, CFA Dr Ian Mortimer, CFA

Fund structure

Dublin OEIC (UCITS IV)

Performance fee

None

Benchmark

MSCI World Index

Administrator

Link Fund Administrators (Ireland) Ltd.

Exit fees

2% within 30 days of purchase

(to mitigate market timing)

Leverage

None

Custodian

JP Morgan

Valuation point

23:00 (Dublin time)

Currency hedging

None

Reporting status

Reporting Fund for UK tax purposes

Dealing cut off

15:00 (Dublin time)

Share classes for UK investors*

Class Currency Max TER (OCF) Description Acc / dist ISIN Y

EUR 0.99% Standard post-RDR share class Accumulation IE00BVYPNZ31 Distribution IE00BVYPP024 * Other share classes available in GBP and USD and at different fee levels

SLIDE 37

Guinness Global Equity Income Fund - all share classes

0.99% OCF 0.74% OCF

For charities

1.24% OCF 1.49% OCF 1.99% OCF

Currency

GBP / USD / EUR GBP GBP / USD USD / EUR GBP / USD / EUR

Initial charge 0% 0% 0% 0% 5% Max total expense ratio (OCF) 0.99% 0.74% 1.24% 1.49% 1.99% Accumulation or Distribution Accumulation Distribution Distribution Distribution Distribution Accumulation Distribution Country registrations*

UK, CH, LUX, FIN, SW, SGP UK, CH, LUX, FIN, SW, SGP UK, CH, LUX, FIN, SW, SGP AT, GER UK, CH, LUX, FIN, SW, SGP USD class: AT, GER, IT UK, CH, LUX, FIN, SW, SGP AT, IT EUR class: GER UK, CH, LUX, FIN, SW, SGP EUR class: AT, GER, IT UK, CH, LUX, FIN, SW, SGP USD class: AT, GER, IT

Name

Y Acc Y Dist Z GBP: “X” / USD: “E” USD: “A” / EUR: “D” C Acc USD: “B” / GBP: “C”

ISIN codes

GBP: IE00BVYPP024 USD: IE00BVYPNX17 EUR: IE00BVYPNZ31 GBP: IE00BVYPP131 USD: IE00BVYPP248 EUR: IE00BVYPP024 GBP: IE00B754QH41 GBP: IE00B7LM5753 USD: IE00B67PB391 USD: IE00B3QG6N78 EUR: IE00B66B5L40 GBP: IE00BVYPNV92 USD: IE00BVYPNW00 EUR: IE00BGHQF631 GBP: IE00B3PB1722 USD: IE00B42XCP33

Bloomberg tickers

GBP: GUGYGBA ID USD: GUGYUSA ID EUR: GUGYEUA ID GBP: GUGYGBD ID USD: GUGYUSD ID EUR: GUGYEUD ID GBP: GUGLEIZ ID GBP: GUGLEIX ID USD: GUGLEIE ID USD: GUGLEIA ID EUR: GUGLEID ID GBP: GUGCGBA ID USD: GUGCUSA ID EUR: GUGLECE ID GBP: GUGLEIC ID USD: GUGLEIB ID

UK: United Kingdom; CH: Switzerland; LUX: Luxembourg; FIN: Finland; SW: Sweden; SGP: Singapore; AT: Austria; GER: Germany; IT: Italy

Source: Guinness Asset Management

SLIDE 38

Appendix 1: Understanding performance

37

Source: Guinness Asset Management

Quality

Operational growth

Value

Multiple expansion

Dividend

Dividend payment 3 drivers of return

Wrong reasoning Correct reasoning Good outcome Luck Skill Bad outcome Mistake Misfortune

▪ Consider total return in context of the three basic drivers of return – how does this compare to our original expectations, and what can we learn from the trade?

SLIDE 39

Appendix 2: What is CFROI?

• HOLT considers a company as the “sum of many investment projects”
• The CFROI measure captures the average IRR (internal rate of return) of all existing projects
• The CFROI, like ROE and RONA, indicates the performance represented by one year's activities
• The CFROI eliminates the biases in ROE & RONA from asset age, life, inflation, & non-cash accounting

38

Source: Credit Suisse HOLT

13 years asset et life e

$100

Inflation-adjusted gross cash flows Non-depreciating asset release Inflation-adjusted gross investment

$10 $25

CFROI = IRR = 6%

SLIDE 40

39

Contact details

Sales, marketing and investor relations

Charlie Riddell charlie.riddell@guinnessfunds.com +44 (0) 20 7222 3473 Flurry Wright flurry.wright@guinnessfunds.com +44 (0) 20 7222 5703 Deborah Kay deborah.kay@guinnessfunds.com +44 (0) 20 7222 2037 Alex Hall alex.hall@guinnessfunds.com +44 (0) 20 7042 6525 Padraig Staunton padraig.staunton@guinnessfunds.com +44 (0) 20 7222 3719

Investment management team

Ian Mortimer ian.mortimer@gafunds.com +44 (0) 20 7222 3115 Matthew Page matthew.page@gafunds.com +44 (0) 20 7222 3085 Sagar Thanki sagar.thanki@gafunds.com +44 (0) 20 7042 6514

Guinness Asset Management Ltd.

14 Queen Anne’s Gate London SW1H 9AA info@guinnessfunds.com www.guinnessfunds.com +44 (0) 20 7222 5703 For your protection, calls to these numbers will be recorded

SLIDE 41

40

Glossary

Volatility: Standard deviation is a statistical measurement that, when applied to an investment fund, expresses its volatility, or risk. It shows how widely a range of returns varied from the fund’s average return over a particular period. Low volatility reduces the risk of buying into an investment in the upper range of its deviation cycle and then seeing its value head toward the lower extreme. For example, if a fund had an average return of 5%, and its volatility was 15, this would mean that the range of its returns over the period had swung between +20% and -10%. Another fund with the same average return and 5% volatility would return between 10% and nothing, but there would at least be no loss. While volatility is specific to a fund’s particular mix of investments, and comparison to other portfolios is difficult, for those that offer similar returns the lower-volatility funds are preferable. There is no point in taking on higher risk than necessary in order to achieve the same reward. Sharpe: This is a commonly used measure that calculates the level of a fund’s return over and above the return of a notional risk-free investment, such as cash or government

• bonds. The difference in returns is then divided by the fund’s standard deviation (volatility). The resulting ratio is an indication of the amount of excess return generated per

unit of risk. Sharpe is useful when comparing similar portfolios or instruments. There is no absolute definition of a “good” or “bad” Sharpe ratio, beyond the thought that a fund with a negative Sharpe would have been better off investing in risk-free government securities. However, in general it is considered that the higher the Sharpe ratio, the better. As the ratio increases, so does the risk-adjusted performance. In effect, when analysing similar investments, the one with the highest Sharpe has achieved more return while taking on no more risk than its fellows — or, conversely, has achieved a similar return with less risk. Downside risk is a measurement that considers only negative returns. It is calculated as a downside deviation of returns below a specified risk-free rate. It represents an estimation of a security’s potential to suffer a decline in price in negative market conditions and could be considered as an estimate of the potential loss on any investment. Sortino Ratio: This ratio is similar to the Sharpe ratio, using downside risk rather than standard deviation as the denominator. Thus, the Sortino ratio is calculated by subtracting the risk-free rate from the return of the portfolio and then dividing by the downside deviation. The Sortino ratio measures the return to “bad” volatility, thereby giving investors a measure to assess risk in a better manner than simply looking at excess returns to total volatility. A large Sortino ratio indicates a low risk. Tracking Error: This statistic measures the standard deviation of a fund’s excess returns over the returns of an index or benchmark portfolio. As such, it can be an indication of “riskiness” in the manager’s investment style. A tracking error below 2 suggests a passive approach, with a close fit between the fund and its benchmark. At 3 and above, the correlation is progressively looser and indicates that the manager will be deploying a more active investment style and taking bigger positions away from the composition of the benchmark. While zero tracking error would indicate a fund that was a perfect replication of its benchmark portfolio, this is hardly likely to be encountered in reality. The fund will not be fully invested at all times in its benchmark components, since an element of liquidity will need to be retained for redemptions, and the assumed reinvestment of dividends will not always be possible. Transaction costs dilute returns — and proportionately more so in smaller funds. Issues of timing and availability mean that changes in the benchmark’s constituents cannot be instantaneously mirrored in the fund’s portfolio. These factors will all produce greater tracking error — and be reflected in the beta and r-squared

• ratios. Ultimately, this is actually only an “error” if the investment strategy goes unrewarded by outperformance of the benchmark.

SLIDE 42

41

Glossary

Information Ratio: The information ratio is a versatile and useful risk-adjusted measure of actively managed fund performance. It assesses the degree to which a manager uses skill and knowledge to enhance the fund returns. It is calculated by deducting the returns of the fund’s benchmark by the fund’s overall returns. This result is then divided by the fund’s tracking error, which is a measure of the volatility of the fund’s excess returns. The value that is arrived is an expression of, for each unit of extra risk assumed, the success of the manager’s decisions (“tilts”) away from the benchmark. The higher the information ratio, the better. It is generally considered that a figure of 0.5 reflects a good performance, 0.75 very good, and 1 outstanding. This is particularly useful when comparing a group of funds with similar management styles and asset allocation policies. If two funds have near-identical alphas, the higher information ratio identifies the manager who has been more skilful in betting on stock picks that deviated from the benchmark or index, while the lower denotes gains that have more to do with market movements than active management. However, this comes with both a caveat and a means of using it creatively. As ever, the r-squared correlation between the fund and its benchmark must be strong if any discrete reliance is to be placed on the information ratio. Its versatility, however, comes from the point that “added value” does not necessarily mean value added to the fund’s own benchmark. Analysts can decide which benchmark or index they wish the fund to outperform and adjust the statistics accordingly. Treynor Ratio: This is another risk-adjusted performance measure, similar in calculation and application to the Sharpe ratio. The difference is that while Sharpe weighs a fund’s returns against total risk (standard deviation, or volatility), Treynor looks at excess return for each unit of systemic risk (the volatility, inherent in the market that cannot be diversified). The Treynor calculation takes the fund’s excess return over a notional risk-free rate, then divides it by the fund’s beta. A Treynor ratio greater than 1 shows that the fund has produced more units of return than of risk. Based on market risk alone, the ratio assumes that nonsystemic risk is capable of being eliminated by diversification across a wide range of investments, and it measures whether the systemic risk has been rewarded. Also known as the volatility-to-reward ratio, Treynor is useful in comparing funds that invest in similar market sectors and achieve similar returns. For example, when assessing a range of UK equity funds, it is the one with the highest Treynor ratio that is taking on the least market risk to achieve its level of performance. Also, since it factors out the manager’s ability from movements in the fund’s sector, Treynor may be used to compare fund performances adjusted for systemic risks in different market sectors because, although intuitively the ratio should be higher for bond funds than for those investing entirely in equities, this is not necessarily true in every case. While not perfect, and not to be taken in isolation, the Treynor ratio can be a pointer to the optimum risk- and sector-adjusted fund for a particular risk-aversion profile. Jensen’s Alpha: This is a risk-adjusted measure used to gauge the extent to which a manager has added value to the returns that could have been expected from a benchmark portfolio, while taking into account the fund’s sensitivity to that benchmark. Jensen’s alpha is therefore a test of whether the fund has achieved better performance than the beta would suggest. If the value is positive, it indicates an active management style with superior stockpicking ability. If the value is negative, it indicates that returns are falling short of the adjusted benchmark return. For further details visit: https://analytics.financialexpress.net/help/documentation/glossary-statistical-calculations/

SLIDE 43

42

Issued by Guinness Asset Management Limited, authorised and regulated by the Financial Conduct Authority. This report is primarily designed to inform you about Guinness Global Equity Income Fund. Any investment decision should take account of the subjectivity of the comments contained in the report. It is provided for information only and all the information contained in it is believed to be reliable but may be inaccurate or incomplete; any opinions stated are honestly held at the time of writing, but are not guaranteed. The contents of the document should not therefore be relied upon. It should not be taken as a recommendation to make an investment in the Fund or to buy or sell individual securities, nor does it constitute an offer for sale. Risk The Guinness Global Equity Income Fund is an equity fund. Investors should be willing and able to assume the risks of equity investing. The value of an investment and the income from it can fall as well as rise as a result of market and currency movement, and you may not get back the amount originally invested. Details on the risk factors are included in the Fund’s documentation, available on our website. Shareholders should note that all or part of the fees and expenses will be charged to the capital of the Fund. This will have the effect of lowering the capital value of your investment. Documentation 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 guinnessfunds.com, or free of charge from:-

▪ the Manager: Link Fund Manager Solutions (Ireland) Ltd, 2 Grand Canal Square, Grand Canal Harbour, Dublin 2, Ireland; ▪ the Promoter and Investment Manager: Guinness Asset Management Ltd, 14 Queen Anne's Gate, London SW1H 9AA.

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. THIS INVESTMENT IS NOT FOR SALE TO U.S. PERSONS. Structure & regulation The Fund is a sub-fund of Guinness Asset Management Funds PLC (the “Company”), 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 this Fund, please consult your investment or other professional adviser. Switzerland The prospectus and KIID for Switzerland, the articles of association, and the annual and semi-annual reports can be obtained free of charge from the representative in Switzerland, Carnegie Fund Services S.A., 11, rue du Général-Dufour, 1204 Geneva, Switzerland, Tel. +41 22 705 11 77, www.carnegie-fund-services.ch. The paying agent is Banque Cantonale de Genève, 17 Quai de l'Ile, 1204 Geneva, Switzerland. Telephone calls will be recorded and monitored. 23/07/2018, EUR

Disclaimer