Income Fund

Individual investors can invest with Merlon via the Merlon Wholesale Australian Share Income Fund (the 'Fund'). The Fund is managed by Merlon Capital Partners, appointed to manage the assets of the fund by the responsible entity, Fidante Partners Limited. This page is issued by the responsible entity, Fidante Partners.

The Fund provides investors with the opportunity to access a diversified portfolio of Australian securities listed or about to list on the Australian Securities Exchange (ASX). The Fund aims to provide a higher level of tax-effective income with a lower level of risk than the S&P/ASX 200 Accumulation Index, while also providing the potential for capital growth and inflation protection over the medium to long term. The Fund pays distributions on a monthly basis. 

The Fund consists of a portfolio of companies with attractive long term valuations and high dividend yields constructed without regard to each stock's index weight. Exposure to equity market fluctuations is reduced using derivatives focused on stocks with poor short-term momentum characteristics.

Deep fundamental research

Our team of five fundamental analysts seek out the most undervalued companies on offer amongst ASX 200 constituents. When measuring 'value' we focus on sustainable free cash flow and franking generation. Candidates identified through this process are thoroughly researched, utilising information gathered from a variety of sources such as company reports, macroeconomic data, third party research, management meetings, customer meetings, competitor meetings and supplier meetings. Candidates are further subjected to a rigorous peer review process prior to inclusion in the portfolio.

No regard for index weight

A portfolio of 30 stocks is developed in approximately equal weight. No regard is paid to a particular stock's index or benchmark weight although we do not invest in stocks offering low levels of liquidity. If necessary, yield constraints are applied to ensure that the Fund dividend yield exceeds the ASX 200 dividend yield and the growth in dividend income exceeds the Consumer Price Index.

Reduced risk

Derivatives are utilised to provide downside protection on stocks within the portfolio with elevated near-term risks. Collectively, derivatives target a 30% reduction in the Fund's equity market exposure while at the same time retaining 100% exposure to associated dividends and franking credits. 

Monthly distributions

The Fund pays monthly distributions primarily backed by fully franked dividends. While derivative strategies may produce income under certain conditions, much of this income is reinvested in downside protection.

For more information please contact us and refer to our fund brochure

 

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Income Fund

A portfolio of undervalued companies constructed without regard to index weights delivering monthly income with downside protection

Value Fund

A portfolio of undervalued companies constructed wihout regard to index weights

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