As part of Zenith’s 2014 International Shares Sector Review, the Epoch funds were upgraded from ‘recommended’ due to their focus on generating “attractive and sustainable cash flow and dividends”.
The Zenith assessment described the New York-based Epoch Investment Partner team as “highly capable” with a “strong investment process”.
“Zenith’s conviction in the funds has strengthened and we have a higher level of confidence that the funds will achieve the investment objectives over a full market cycle,” Zenith said.
The funds are distributed in Australia by investment advisory house Grant Samuel Funds Management.
Grant Samuel director and head of distribution Damien McIntyre said the funds’ focus is investing in companies that are generating free cash flow.
“Grant Samuel Funds Management brought this fund to the market because it identified a real gap in the offerings available. There were no international funds with specific dividend objectives,” Mr McIntyre said.
“There is a huge home bias with Australian investors, which is largely because of the attraction of dividends and the dividend imputation system. Investors hadn’t been able to access dividends from global companies,” he said.
“Companies in the [Epoch] portfolio are chosen based on their management’s ability to create value for shareholders through consistent and rational capital allocation policies, with an emphasis of cash dividends, share buy-backs and debt reduction. These are the key components of sustainable shareholder yield,” Mr McIntyre said.
“The strategy has been running for over six years, and during this time it has more than delivered on its objectives,” he said.
“The funds have been through a full market cycle and to date have not only outperformed, but have done so with lower volatility than most equity products while it delivered higher levels of income,” Mr McIntyre said.
“These are factors that are increasingly important to retail investors, including self-managed superannuation fund investors,” he added.
