The Merlon Australian Share Income Fund is a portfolio of what we consider to be undervalued companies constructed without regard to index weights, delivering monthly income with downside protection.
Differentiating features of the Fund
- Deep fundamental research. This is where we spend the vast majority of our time and ultimately how we expect to deliver superior risk-adjusted returns for investors.
- Portfolio diversification with no reference to index weights. The benchmark unaware approach to portfolio construction is a key structural feature, especially given the concentrated nature of the ASX200 index.
- Downside protection through fundamental research and the hedge overlay. In addition to placing a heavy emphasis on capital preservation through our fundamental research, we use derivatives to reduce the Fund’s market exposure and risk by 30% whilst still retaining all of the dividends and franking credits from the portfolio.
- Sustainable income, paid monthly and majority franked. As the Fund’s name suggests, sustainable above market income is a key objective but it is an outcome of our investment approach.