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Legg Mason: Real Income & Equity Income funds ranked 1 & 2 in Mercer Survey

Legg Mason: Real Income & Equity Income funds ranked 1 & 2 in Mercer Survey

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They’re two different funds designed to provide sustainable income with in-built inflation protection. Find out what makes these two innovative strategies so compelling for income seekers.

Legg Mason Martin Currie Real Income Fund

The Legg Mason Martin Currie Real Fund aims to deliver an attractive and sustainable income stream, even in a low interest rate environment.

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The Fund is a unique offering in Australia, as it combines listed real assets such as listed property, toll roads, utility companies, shopping centres and airports.

Such businesses are essential for our everyday living, and a vital backbone for Australia’s growing population.

The Fund’s underlying investment strategy is ranked number 1 in its Mercer Survey peer group over 3 months, 1 and 2 years to August 20161. The Fund delivered an income return of 6.1%2 for the year to September. On a forward looking basis, despite some recently volatility in bond yields, the Fund is expected to provide a dividend yield of 6.1% (grossed up for franking credits) over the next 12 months3

One of the most attractive features of many real assets is that they can increase their own revenues in line with inflation (think of annual increases in energy bills or toll-road charges). This can help support growth in the income level of the Fund over time.

The Fund has achieved solid capital growth as well as income, and this has been supported by the Fund’s strategy to re-invest its net realised capital gains, which aims to build a bigger base of capital, similar to the compounding interest principal. 

Legg Mason Martin Currie Equity Income Trust

The Legg Mason Martin Currie Equity Income Trust is highly rated by two major research houses, and it aims to deliver an attractive and growing income stream by investing in high-quality ASX-listed companies.

Growing the income stream is important as it can help protect against inflation and reduce longevity risk. The Trust targets income growth in four ways:

  1. Natural dividend growth of the companies it invests in, as dividends are the basis for the Trust’s income return to investors
  2. Active selection of companies with sound business models and an ability to sustain their dividends through the business cycle (and offer long term capital growth)
  3. A strategy to re-invest its net realised capital gains, which aims to build a bigger base of capital, similar to the compounding interest principal. 
  4. A natural bias to sectors matched to consumer spending, which can provide better asset and liability matching for Australian investors.

The Trust’s underlying investment strategy is ranked number 2 in its Mercer Survey peer group over 3 months, 1 year, 2 year and 3 years to August 20161.

The Trust delivered an income return of 6.4%2 for the year to September. On a forward looking basis, despite some recently volatility in bond yields, the Trust is expected to provide a dividend yield of 7.1% (grossed up for franking credits) over the next 12 months3.

The Trust has transparent and cost effective investment approach that does not use derivatives and relies simply on the dividends of the companies to deliver income to investors.

Legg Mason an income provider

Legg Mason offers a range of income solutions catering to different investor risk (and return) profiles: Real Income, Equity Income, Multi Asset Income and Australian Fixed Income.

If you would like to know more about Legg Mason’s income suite, call our income hotline on 1800 679 541 or visit our website.

 

1 Mercer Investment Performance Survey of Australian Shares (Income-oriented) as at 31 August 2016. Returns are stated gross of fees.

2 Returns are based on the one-year return, net of fees as at 30 September, calculated by Legg Mason. Net return is not part of the Mercer Survey.

3 The yield forecast for the next 12 months is calculated using the weighted average of broker consensus forecasts of each portfolio holding and research conducted by Legg Mason Asset Management Australia Limited and is gross of fees. Neither the yield forecasts nor past performance is a guarantee of future results.

Past performance is not a reliable indicator of future performance.

Any reference to “Legg Mason Australia” or “Martin Currie Australia” is a reference to Legg Mason Asset Management Australia Limited ABN 76 004 835 849 AFSL 240827. Martin Currie Australia is a division of Legg Mason Asset Management Australian Limited. Neither Legg Mason Australia, nor any of its related parties, guarantee the repayment of capital or performance of any of the trusts referred to in this document. Past performance is no guarantee of future performance. Applications to invest in a Legg Mason Trust can be made using an application form comprising part of the current Product Disclosure Statement, which is available from our offices or on our website at www.leggmason.com.au. Certain eligibility criteria applies. Legg Mason Australia does not guarantee the accuracy or completeness of this document. To the extent permissible by law, Legg Mason Australia accepts no liability in contract, tort (including negligence) or otherwise for any loss or damage suffered as a result of reliance on this document. This document does not constitute investment advice, and has not been prepared to take into account the investment objectives, financial objectives or particular needs of any particular person. Before making an investment decision you should read the Product Disclosure Statement carefully and you need to consider, with or without the assistance of a financial advisor, whether such an investment is appropriate in light of your particular investment needs, objectives and financial circumstances.

Legg Mason: Real Income & Equity Income funds ranked 1 & 2 in Mercer Survey
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