Legg Mason Martin Currie Real Income Fund surpasses $500 million in funds under management

From

Andy Sowerby

Legg Mason, a global multi-affiliate investment manager, today announced that the Legg Mason Martin Currie Real Income Fund has now over $500 million in funds under management.

Legg Mason Managing Director, Australia and New Zealand, Andy Sowerby said: “Launched in late 2010 the Legg Mason Martin Currie Real Income Fund is an investment strategy designed to deliver a high level of sustainable income with a target to grow the income ahead of the rate of inflation.

“As with any new approach, the market took time to understand the strategy but with over six years of proven returns the Fund has become increasingly popular with financial advisers and other investors.”

The Fund aims to provide an income that is at least 20% higher that the S&P ASX 200 index and grow this income stream in excess of the rate of inflation (as measured by the Consumer Price Index). It invests across Australian REITs, utility, infrastructure and like securities that are listed on the Australian Stock Exchange.

Sowerby added: “In a low growth, low interest rate world, for the income investor, listed real assets are the missing link between equities and fixed income. This asset class is ideally structured to provide a long-term income stream with similar characteristics to a fixed income security plus have the potential for capital growth, but with lower overall risk than a traditional equity strategy.”

Ashton Reid, Portfolio Manager added: “The benefit of real assets in any portfolio is their ability to provide natural inflation protection, so income is expected to go up, not down over time. While A-REITs undoubtedly have an important role to play within a real asset strategy, in designing this fund we felt that constraining an income investor’s exposure to only this segment would introduce unnecessary levels of concentration risk. We therefore expanded our universe to include other listed real assets including infrastructure and utilities which has added significant value to our approach.”

“Real assets generally have a large ‘sunken’ capital base that drives future cash flow. This means that growth does not necessarily rely on further investment expenditure rather it is about harvesting the income from previous investment. For real assets, returns are less likely to be swayed by the ups and downs of the business cycle, resulting in significantly more stable dividends for investors.”

Reid also noted: “Our research is focussed on uncovering those investments with the clearest visibility on future cashflows, and avoiding the riskier assets, and through careful stock selection and robust portfolio construction we have delivered better capital protection than the broader equity market over time.”

The fund has received independent research ratings – ‘Recommended’ – by Lonsec and Zenith.

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