For in this week’s episode of ETF 360, Tom Lydon, CEO of ETF Trends, and Dave Nadig, CIO, spoke with Matthew Page, portfolio manager at Guinness Asset Management.
Watch the full ETF 360 episode here:
With the most important concerns for advisors these days being about inflation and finding returns for clients, Lydon is keen to know what kind of advice Page has to offer. For Page, it’s about finding companies willing to pass on the inflation they experience through price increases, as well as companies with strong balance sheets.
“The ability to withstand any level of inflation that we see, whether transient in the short term or persisting in the long term,” Page adds, “means that inflation is not necessarily a bad thing for stocks if companies can maintain their margins, and that will also increase their profits with this inflation. ”
Looking at Guinness Atkinson’s SmartETF Dividend Generating ETFs (DIVS)Nadig wants to know what sets this actively managed fund apart. As Page explains, this is a highly concentrated and actively managed portfolio of 30 stocks.
“We’re looking for the best dividend payers, but only that. We want companies that have been groomed for short, medium and long term dividend growth. So I think in this environment where people are worried about inflation that focuses on dividend growth rather than high yield can be a good hedge against that. “
Additionally, Guinness Atkinson owns companies all over the world, which helps in trying to strike a balance between these great national stocks and the best-in-class companies that can be found internationally.
Looking at the conversion that took Guinness from an old-fashioned mutual fund to something with a neat ETF wrapper, Page notes how much of a success being the first to market in this market has been. With that in mind, there is still so much money in mutual funds, but even with the ETF envelope, that doesn’t mean you need to force one on the other.
As far as one example of action Page wanted to highlight, Taiwan Semiconductor has everything Guinness Atkinson is looking for. It consistently delivers a high return on capital; it has great growth opportunities; it’s very cash-generating, which is needed for this dividend. Finally, it is investing around $ 30 billion this year to grow its business and grow, which is necessary if the intention is to increase its dividend over time.
In addition, it functions as a business that can pass inflation on to the investor. This, in turn, becomes income for them, which helps offset inflation. Basically, semiconductors are a great area to build on for this process.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.