At the cornerstone of Epoch’s investment philosophy and process is the belief that the growth and allocation of free cash flow represents the best predictor of long-term shareholder return.

Fund Overview

The Fund is designed to seek attractive total returns with an above average level of income from a diversified portfolio of global companies that are sustainably growing their free cash flow year after year, and returning that cash to shareholders through consistent or increasing dividends, share buybacks and debt reduction. Epoch defines these uses of free cash flow as ‘shareholder yield’.

The shareholder yield sought by Epoch:

9 percent solution

Before making an investment, Epoch analyses a company as if it were looking to purchase the entire business. The Fund invests in businesses with understandable operating models, transparent financial statements, and a proven ability to generate free cash flow.

By actively seeking companies with strong shareholder yield characteristics, Epoch’s goal is to construct a portfolio that will achieve a higher level of yield than other income options, as well as capital growth.

This can be particularly important in a retirement portfolio; capital appreciation can help boost assets in the accumulation phase, and help sustain a portfolio during the drawdown phase.

The Fund at a glance

  • A diversified portfolio of 90-120 global companies with attractive income and capital growth potential
  • Risk management is integrated into the investment process and seeks to achieve the least possible volatility for the return characteristics sought
  • Complements other global equity strategies that primarily focus on traditional valuation methods and capital appreciation
  • Suitable for investors seeking income; generally provides a tax-effective income (yield + low turnover)
  • Highly regarded by research houses
  • Epoch was one of two finalists in the 2016 Professional Planner|Zenith Fund Awards for this strategy.

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Like to know more? This 90-second video provides a simple explanation of the shareholder yield strategy.