Diversified approach wins out in equity income sector

Zurich colonial first state lonsec

23 May 2012
| By Staff |
image
image
expand image

Zurich Investment Equity Income Fund and the Colonial First State Wholesale Australian Equity Income Fund have both been awarded a 'highly recommended' rating in Lonsec's Equity Income Sector Review.

The survey also considered five prospect funds, one of which was added to Lonsec's recommended list, the Legg Mason Australian Equity Income Trust.

No funds on Lonsec's recommended list invest predominantly in offshore assets, but Lonsec senior investment analyst Lin Ngin said that investment products focused on income generation would broaden and were likely to include global equities, fixed income and other Australian equity strategies as part of their approach.

"Products simply buying stocks expected to deliver higher dividends are being left behind in terms of innovation," Ngin said.

There has been significant performance disparity between long-only funds and products that implement derivative strategies.

Funds that diversify the composition of their distributions have the ability to participate in corporate strategies for lower yielding stock, "which has resulted in a noticeable uplift in franking level for the more innovative strategies", she said.

"Lonsec has a higher regard for funds able to provide consistent income without eroding the capital base," Ngin added.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

3 weeks 4 days ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

2 months 3 weeks ago

ASIC has taken action against a Queensland adviser who was sentenced last May for misappropriating $1.8 million from his clients....

2 weeks 3 days ago

AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions. ...

2 weeks 3 days ago

A former Insignia Financial C-suite exec has taken on a leadership role at MUFG Retirement Solutions as it announces chief executive Dee McGrath will depart after six yea...

2 weeks 4 days ago

TOP PERFORMING FUNDS