Nikko AM Australian Share Income Fund

The Nikko AM Australian Share Income Fund invests in 40-70 stocks. It is designed to primarily provide tax-effective income and also the potential for capital growth.

Quarterly Fund Update - Q4 2016

Michael Maughan, Portfolio Manager & Senior Analyst

Investment objective

The Fund aims to provide a tax-effective income stream that exceeds the dividend yield of the S&P/ASX 200 Accumulation Index (grossed up for franking credits) by 2% p.a. over rolling five-year periods, before fees, expenses and tax, plus the potential for capital growth over the long term.

Key benefits

Consistent Income
‘Consistent Income’

Income

The Fund has consistently delivered an income (distribution) return of 6.1% pa (after fees and before franking credits) since its inception in November 20081. The income has been primarily derived from being fully invested in Australian shares.

Capital Growth
Capital Growth

Growth

Since inception the Fund has met its secondary objective of providing capital growth – providing an important hedge against inflation.

Tax effective
Tax effective

Tax effective

The Fund’s focus on investing in high dividend paying shares with franking credits, as well as participating in off-market share buy-backs and minimising portfolio turnover has delivered after-tax benefits for investors.

Lower volatility
Lower volatility

Lower volatility

A diversified portfolio of high dividend-paying shares has also helped to produce lower volatility in returns versus the S&P/ASX 200 Index over the life of the Fund.

Reduced concentration risk
Reduced concentration risk

Risk

The Fund is actively managed and constructed independently of an index (within specified risk parameters). This, together with its focus on total shareholder returns, not just dividend yield, across all sectors, provides an important buffer against concentration risk.

Fund characteristics

  • Income focused, with the Fund’s primary objective to deliver tax effective income
  • Diversified portfolio (invests in 40-70 stocks)
  • Constructed on an absolute risk basis
  • Typically has lower volatility than the market
Nikko AM Australian Share Income Fund at a glance
Portfolio ManagersMalcolm Whitten & Michael Maughan
Inception dateNovember 2008
BenchmarkS&P/ASX 200 Accumulation Index yield (grossed up for franking credits)
Management Cost0.85% p.a.
Minimum initial investment*$20,000
Minimum additional investment*$1,000
Distribution frequency^Quarterly following 30 June, 30 September, 31 December, 31 March.
1
As at 31 March 2016. Fund distribution return equals Total Fund return minus Fund growth return. Nikko AM Australia returns are post fees, pre tax using redemption prices and assume reinvestment of distributions. Past performance is not an indicator of future performance
*
Nikko Asset Management Australia Limited ABN 34 002 542 038 AFSL 229664 (Nikko AM Australia), is the Responsible Entity and the issuer of units in the Fund and may accept lower amounts at any time at its discretion.
^
Fund returns can be volatile. Nikko AM Australia does not guarantee to provide distributions, or the amount of distributions.
+
The Fund was renamed Nikko AM Australian Share Income Fund on 1 February 2017. The Fund was previously known as Nikko AM–Tyndall Australian Share Income Fund.
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