Nikko AM Australian Share Income Fund
Quarterly Fund Update - Q4 2016
Michael Maughan, Portfolio Manager & Senior Analyst
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.
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.
Since inception the Fund has met its secondary objective of providing capital growth – providing an important hedge against inflation.
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.
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
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.
- 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
|Portfolio Managers||Malcolm Whitten & Michael Maughan|
|Inception date||November 2008|
|Benchmark||S&P/ASX 200 Accumulation Index yield (grossed up for franking credits)|
|Management Cost||0.85% p.a.|
|Minimum initial investment*||$20,000|
|Minimum additional investment*||$1,000|
|Distribution frequency^||Quarterly following 30 June, 30 September, 31 December, 31 March.|