Australian ETF issuer BetaShares, in partnership with asset management giant Legg Mason, has launched two actively managed ETFs on the Australian Stock Exchange.
The funds provide exposure to high quality Australian securities with a focus on income generation.
Based on investment strategies by Legg Mason affiliate Martin Currie Australia, both funds target high-quality Australian securities with a focus on income generation.
BetaShares’ chief executive officer, Alex Vynokur, said of the partnership: “Legg Mason is one of the world’s largest and most experienced asset managers with market-leading investment management capabilities across multiple major asset classes, so we’re excited to be part of this collaboration.
“Combining Legg Mason’s award-winning active management capability with BetaShares deep ETF skillset, the partnership aims to deliver a suite of high quality Active ETFs that give Australian investors more solutions to diversify their portfolios and achieve their investment objectives.”
Both ETFs aim to provide an after-tax income yield above the S&P/ASX 200 Index and to grow this income above the rate of inflation. Distributions are made to investors on a quarterly schedule.
The BetaShares Legg Mason Equity Income Fund (EINC AU) invests in a portfolio of income-oriented Australian shares. Constituents are selected based on fundamental quality screens to determine the stocks likely to maintain or grow their dividend payments.
The forecast portfolio yield over the next 12 months is expected to be 5.3% or 7.0% with the application of franking credits – a type of dividend imputation used to reduce or eliminate the double taxation of dividends.
The fund’s largest sector exposures are currently non-bank financials (19.9%), banks (15.2%), consumer staples (15.2%), consumer discretionary (14.6%) and utilities (10.7%).
The BetaShares Legg Mason Real Income Fund (RINC AU) invests in a portfolio of listed Australian real assets, such as REITs, utility and infrastructure securities. According to BetaShares, real assets can have large ‘sunk’ capital bases driving cash flow, so future growth may be less affected by the business cycle, resulting in more stable dividends for investors.
The forecast portfolio yield over the next 12 months is expected to be 5.8% or 6.0% with the application of franking credits.
The fund’s largest sector exposures are currently retail REITs (28.1%), diversified REITs (21.6%), multi utilities (20.5%), and gas & electricity grids (10.8%).
The funds are actively managed by Legg Mason’s investment team. Each has an expense ratio of 0.85%.