Income investing in the world's best companies

Kera Van Valen, the portfolio manager for the Epoch Global Equity Shareholder Yield Fund, says its relentless approach on income and quality in stock selection has helped the fund outperform the market through downturns such as that triggered by President Trump's tariffs on US imports.

In fact, the Epoch Fund has outperformed the market defined by the MSCI World-ex Australia Index 86% of the time when the market has been down more than 5% since the fund's inception in 2008.  

"We look for companies that generate sustainable and growing free cashflow and have made a commitment to returning cashflow to shareholders in the form of dividends, buybacks, and debt reduction," Van Valen tells Livewire.  

Epoch Investment Partners, now has more than $50 billion in funds under management and its flagship Global Equity Shareholder Yield Fund is distributed by GSFM in Australia. 

The fund typically holds around 100 positions split largely between the US and Europe, with a focus on generating income that is paid quarterly to its investors. 

The total return including income and growth to investors has been 11.99% net of fees over the past five years to April 30, 2025. 

Investment process

Alongside Van Valen, the fund has two other co-portfolio managers from a fundamental and risk management standpoint, with four dedicated equity research analysts on the research side.

"So we look for 4% to 4.5% [in returns] to come from dividends, and another 1.5% to 2% to come from buybacks and at least 3% to deliver this market like return over time," says Van Valen. 

"We want to find companies with management teams that understand to return excess free cashflow [to investors], so if a company's cash flow is growing the cash distributions back to shareholders should grow over time."

The fund also specifically targets blue-chip or growth-style companies it expects to consistently lift its dividends over long periods of years. 

For example in 2024, 96 of the companies the fund owned lifted their total dividend payouts and the fund only held 106 positions as at April 30. 

Among the fund's top ten holdings as at April 30 are computing and artificial intelligence giant Microsoft (NYSE: MSFT), semiconductor manufacturer Broadcom Inc (NASDAQ: AVGO), alongside sprawling healthcare giants Novartis and Sanofi. 

Van Valen says the fund's strength is that it buys large and high-quality companies, which return reliable cash flows. This means it should navigate the regular turbulence that share markets are well known for partly as it can rely on returns from dividends. 

"We expect volatility as there's a lot of uncertainty," Van Valen says of US President Trump's shock trade policies. "The [fund's] strategy happens to be more defensive by nature by being more of an income oriented strategy. So, we think we're well positioned to protect on the downside and participate on the upside."

If you want to watch more from Van Valen on how the fund is managed and delivers returns for investors, please watch the full video above. 

Time Codes

0.00 - Introduction
0.21 - Kera's role at Epock
1.41 - Epoch's research team and investment process
2.05 - The fund's targeted return and portfolio size
3.05 - The fund's geographic and sector weightings
3.42 - What qualities Epoch looks for in stocks
4.40 - Macro views on tariffs
5.30 - 2025 performance