Fund manager Ausbil has launched a new product – an Active Dividend Income Fund which it describes as combining a core and tactical allocation approach to generating higher dividend income, paid to investors in monthly distributions.
Commenting on the launch of the new product, portfolio manager, Michael Price said that in a low rate environment, and with people living longer in retirement, investors needed diversified and higher income sources, with the potential over the long term for capital to grow.
The company said the Ausbil Active Dividend Income Fund would actively invest in Australian securities to generate dividend income through sustainable earnings upgrades, cyclical opportunities, sentiment-driven mispricing, dividend imputation and franking credits, and tactically allocating to dividend-paying securities.
The Fund invests primarily in S&P/ASX 200 companies which are expected to generate growing dividend streams supported by revenues, earnings and free cash flows.
“Strategies such as tactical allocation to dividend paying securities, and opportunistic investment in cases of temporary mispricing of yield, can generate additional active income,” Price said. “With an active dividend approach, we are able to generate monthly distributions rather than half-yearly.”