The Fund takes a global approach in seeking dividend growth that exceeds the rate of inflation.
Woodland Hills, CA, March 30, 2012 – Guinness Atkinson Asset Management, advisor to the Guinness Atkinson Funds, today announced the launch of the Inflation Managed Dividend Fund (GAINX), a new equity strategy for investors seeking current income and consistent dividend growth that exceeds inflation. The fund will be managed by portfolio managers Dr. Ian Mortimer and Matthew Page, CFA, who have been with the company’s investment team since 2006 and 2005, respectively.
The global strategy, unconstrained by benchmark, utilizes Guinness Atkinson’s proprietary screening process to identify high quality, cash-generating companies to create a portfolio income stream that grows faster than inflation.
“Income oriented investors are facing unprecedented challenges in their search for yield while attempting to manage risk adequately, and the potential threat of rising inflation only compounds their difficulties,” said Jim Atkinson, CEO of Guinness Atkinson Asset Management. “Our new strategy is designed to help play a role in meeting this challenge, with a focus on stable, high-quality companies across the globe that share a common trait: a history of generating consistently high cash flows and consequently rising dividends which produced an income stream growing faster than the rate of inflation.”
The fund seeks to invest in high quality, cash-generating and stable companies to construct an equally- weighted, concentrated portfolio of 35 stocks, diversified by geography and sector. A focus on companies that have generated consistent, inflation adjusted cash flow return on investment in excess of 10 percent for ten consecutive years can lead the investment team to a universe of companies that have flourished even during recessionary periods, while also screening out highly cyclical companies.
“We feel strongly that our process of identifying stable cash-generating companies is preferable to a yield-only approach,” said Ian Mortimer, co-manager of the fund. “Encouragingly, the universe of companies that meets our criteria has been steadily growing, both in absolute size and in global breadth,” he continued.
The team’s investment process includes screening their universe of equities by valuation, cash-flow, analyst sentiment, and stock price momentum. The compact portfolio of 35 equally-weighted names instills a strict sell-discipline to ensure a portfolio of best ideas.
“We are finding opportunities in a wide array of sectors and across the market-cap spectrum,” said Matthew Page, co-manager of the fund. “This diversification, combined with our disciplined portfolio construction, may limit stock-specific and sector risk, reinforcing the strategy’s focus on stability, while still aiming for consistent, inflation-beating growth,” he concluded.
About Guinness Atkinson Asset Management
Guinness Atkinson Funds encompass a range of thematic investments that combine an optimistic worldview focused on human progress with a systematic investment approach to help investors’ capitalize on long-term investment trends. The Guinness Atkinson Inflation Managed Dividend Fund joins a suite of seven other no-load mutual fund strategies focused on themes set to transform the world over the next fifty years and beyond.
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 800-915-6566 or visiting gafunds.com. Read it carefully before investing.
Mutual fund investing involves risk and loss of principal is possible. Investments in foreign securities involve greater volatility, political, economic and currency risks and differences in accounting methods. These risks are greater for emerging markets countries. The Fund also invests in smaller companies, which will involve additional risks such as limited liquidity and greater volatility. The Fund may invest in derivatives which involves risks different from, and in certain cases, greater than the risks presented by traditional investments.
Diversification does not assure a profit nor protect against loss in a declining market.
While the funds are no-load, management and other expenses still apply. Please refer to the prospectus for further details. Cash Flows are a revenue or expense stream that changes a cash account over a given period.
Cash Flow Return on Investment (CFROI*) is a valuation model that assumes the stock market sets prices on cash flow, not corporate earnings. It is determined by dividing a company’s gross cash flow by its gross investment.
*CFROI is a proprietary metric prepared by HOLT, a division of Credit Suisse. CFROI is a registered trademark of Credit Suisse AG or its affiliates in the United States and other countries. For more information on HOLT, a corporate performance and valuation advisory service of Credit Suisse, please visit their website at https://www.credit-suisse.com/investment_banking/holt/en/index.jsp
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