About Australia Equity Income
The Martin Currie Australia Equity Income strategy is designed for investors looking for a high, stable and growing income stream, with lower volatility than the broader equity market.
The strategy invests in a diversified portfolio of high-quality securities that pay higher income, provide inflation protection and have lower volatility than the share market.
The benchmark unaware portfolio construction, with low security and sector concentrations, avoids income shocks, and provides greater diversification across economic sectors, helping to hedge against inflation / cost of living.
It also avoids costly derivatives strategies for income enhancements or capital protection to improve capital growth.
The strategy is designed to extract full benefit of franking credits and maximise after tax income for 0% tax payers.
Our approach is premised on the philosophy that high-quality companies that have solid earnings can sustain dividends, grow distribution to match rises in the cost of living and are likely to be less volatile than the wider equity market.
We believe that maximising income and minimising risks such as impaired income, concentration and inflation, is a much more important risk measure than benchmark relative alpha and tracking-error measures. As such we believe that the traditional approach to think about benchmark relative risk may not be appropriate in income focussed portfolios.
We aim to build an income-focused portfolio with:
- an above average franked dividend yield;
- a lower-than-market total risk outcome;
- with lower debt and higher quality than the broader market.
Research outputs from Martin Currie Australia’s multi-lensed approach are combined with our investment thesis to determine conviction and individual security target weightings.
The diversified portfolio is constructed on a bottom-up, benchmark unaware basis, taking into consideration stock limits as well as sectorial diversification.
| Portfolio characteristics | Australia Equity Income |
|---|---|
| Long-term objective | To provide an after-tax yield above the S&P/ASX 200 Index and to provide income stream growth above inflation |
| Investable Universe | Australian listed securities |
| Benchmark | Benchmark unaware |
| Market capitalisation | All cap |
| Country limit | N/A |
| Sector limit | Absolute 22% |
| Security limit | Absolute 6% |
| Number of stocks | Typically 45 |
| Portfolio turnover | Typically 25% p.a. |
| Forecast tracking error | We do not target tracking error but total risk outcome is typically 90% of the market. |
| Inception | 22 May 2010 |
The characteristics shown are guidelines only and not hard limits.
Income certainty and stability for retirees
This can be improved by focussing on multiple income sources: investing in companies that pay Sustainable Dividends, actively seeking high levels of franking, and improving income growth by reinvestment of capital gains.
Reece Birtles
Chief Investment Officer
Reece Birtles
- Job title
- Chief Investment Officer, Australia – Non Executive Director
- Experience
- 30 years
Michael Slack
- Job title
- Head of Australian Equity Research
- Experience
- 32 years
We have put the income needs of clients at the heart of the product design for the Martin Currie Australia Equity Income strategy.
How to invest
Please contact us to discuss the most appropriate investment to meet your requirements.
How to invest
Martin Currie is a Specialist Investment Manager of Franklin Resources Inc, operating as Franklin Templeton.
Franklin Templeton is responsible for the sales and client service of our funds for financial advisers and individual investors.
If you would like to find out more about these funds, please visit the Franklin Templeton website.
How to invest
Martin Currie is a ‘Specialist Investment Manager’ within the Franklin Templeton group.
Franklin Templeton is responsible for the sales and client service of our funds for financial advisers and individual investors.
If you would like to find out more about these funds, please visit the Franklin Templeton website.
How to invest
Martin Currie is a ‘Specialist Investment Manager’ within the Franklin Templeton group.
Franklin Templeton is responsible for the sales and client service of our funds for financial advisers and individual investors.
If you would like to find out more about these funds, please visit the Franklin Templeton website.
Funds available
Through our parent company, Franklin Templeton, investors are offered access to the below funds.
Related insights
-
When uncertainty is high, not all equities are created equal - six ways to improve your income
With uncertainty across markets expected to persist, and inflation set to rise, retirees need a source of high, stable and growing income that can offset cost of living rises and longevity risk.
- Date published
- 29 Mar 2022
- Tag
- Australia Equity Income
-
Australian Reporting Season Wrap - “A return to the ‘old’ normal”
What will be the true impact on earnings and dividend outlooks from the impact of rising operating costs, shortages, rate rises, and margin pressures? Are we seeing a return to an old normal for inflation? And what does this mean for Value-style stocks?
- Date published
- 29 Mar 2022
- Tag
- Australia Value Equity
-
Update regarding the Australia Unit trust range and Australian legal entity
In July 2020, Franklin Templeton acquired Legg Mason, becoming the world’s sixth largest asset manager. As a result of the acquisition, Franklin Templeton Australia have made several changes to reflect the new ownership and brand identity in Australia.
- Date published
- 1 Oct 2021
- Tag