About Australia Ethical Income
The Martin Currie Australia Ethical Income strategy is designed for investors looking for a high, stable and growing income stream, with lower volatility than the broader equity market, while accommodating for client-driven ethical values.
The strategy invests in a diversified portfolio of ethically screened high-quality companies that pay higher income, provide inflation protection and have lower volatility than the share market.
This strategy accommodates client-driven ethical values screens that identify and assess business involvement in unethical industries, and an ESG impact screen for poor corporate behaviour and severe business controversies.
Our approach is premised on the philosophy that high-quality companies that have solid earnings can sustain dividends, match rises in the cost of living and are likely to be less volatile than the wider equity market.
We believe that the inclusion of ethical values is complementary to our focus on high-quality companies, and thus does not compromise the generation of a high, stable and growing income stream.
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 thinking about benchmark relative risk may not be appropriate in income focussed portfolios.
We aim to build an income-focused portfolio of ethically screened companies 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 of 40-60 securities is constructed on a bottom-up, benchmark unaware basis, taking into consideration stock limits as well as sectorial diversification.
| Portfolio characteristics | Australian Ethical 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 25% |
| Security limit | Absolute 6% |
| Number of stocks | 40 - 60 |
| 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 | 8 December 2015 |
The characteristics shown are guidelines only and not hard limits.
Should your ethics mean compromising on yield?
Investors don’t want to have to choose between their values and income – and we believe they shouldn’t have to.
Will Baylis
Portfolio Manager
Reece Birtles
- Job title
- Chief Investment Officer, Australia – Non Executive Director
- Experience
- 28 years
Will Baylis
- Job title
- Portfolio Manager
- Experience
- 35 years
We have put the income needs of clients, and their values, at the heart of the product design for the Martin Currie Australia Ethical Income strategy.
How to invest
We offer investors access to our strategies through a segregated account or a range of pooled vehicles.
Please contact us to discuss the most appropriate investment to meet your requirements.
How to invest
Martin Currie is an independently managed investment affiliate of Legg Mason, one of the world’s largest asset management firms.
Legg Mason 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 Legg Mason website.
How to invest
Martin Currie is an independently managed investment affiliate of Legg Mason, one of the world’s largest asset management firms.
Legg Mason 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 Legg Mason website.
How to invest
Martin Currie is an independently managed investment affiliate of Legg Mason, one of the world’s largest asset management firms.
Legg Mason 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 Legg Mason website.
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