Ausbil has launched its first active ETF in response to adviser demand for a dual-access product offering regular monthly income.
The Ausbil Active Dividend Income Fund – Active ETF (DIVI) holds between 25–50 listed companies which Ausbil believes support consistent dividends and franking credits for investors that grow with inflation over time, providing investors with a consistent monthly income.
As flagged by Money Management last year, the ETF will offer efficient access to income-focused solutions for advisers, self-managed superannuation funds (SMSFs) and investors.
The Australian equities fund currently has $967 million in funds under management and was launched in July 2018, but the ASX listing means it is now available in ETF format and as a managed fund.
Mark Knight, chief executive of Ausbil, said: “This milestone marks a significant step in making our income-focused strategies more accessible to more investors. By offering an active ETF, we’re meeting the requests of brokers, financial advisers, SMSFs, and mum and dad investors for a more convenient and efficient way to generate regular monthly income from equities, with the potential for additional capital growth.”
Top holdings include Commonwealth Bank, BHP, CSL and National Australia Bank, but portfolio manager Michael Price said he is eager to ensure it is diversified beyond those large banks and resources which dominate the index.
He said: “Ausbil’s active management, a rigorous top-down macro and bottom-up fundamental process, and dynamic portfolio positioning provides investors with a solution focused on delivering sustainable monthly income with the benefit of franking credits.
“With a handful of large banks and resource companies paying the majority of dividends each year, relying solely on these sectors can expose investors to risk if dividends are cut. DIVI’s active management approach allows us to diversify beyond the biggest payers, targeting high-quality companies with sustainable dividend growth and offers the resilience to maintain income through changing market conditions. This ensures our investors are well-placed to be exposed to quality income opportunities in any market environment.”
This is just one of multiple asset managers that have broadened their ranges this year to include active ETFs such as BlackRock, Schroders, GCQ Funds Management, PIMCO and Macquarie Asset Management.
The attraction of launching an active ETF is for asset managers to broaden their investor reach with more investors, such as those in self-managed super funds (SMSFs) able to easily access the funds in an ETF format.
