Maple-Brown Abbott has established an Asian equities fund aimed at delivering investment growth and consistent and reliable income to investors.
The Maple-Brown Abbott Asian Dividend Growth Fund provides investors with a portfolio exposed to both sustainable and growing income streams across Asia. It aims to deliver an attractive total return over a five-year period while maintaining a dividend yield in excess of the MSCI All Countries Asia excluding Japan Net Index (AUD). The fund focuses on companies with both the ability and intention to offer sustainable and growing income.
Maple-Brown Abbott has been investing in the Asian region for nearly 20 years, and CEO and managing director Sophia Rahmani says the new fund takes advantage of the team’s in-depth understanding and knowledge of the region and its potential.
“The Asian Dividend Growth Fund is a natural extension of the team’s deep experience in managing Asian equity portfolios. We have one of the largest Sydney-based Asian equity teams, and our team developed this new strategy recognising the importance dividends play in the long-term return provided by Asian equity markets.
“With nearly 20 years’ experience in managing Asian equity portfolios across multiple market cycles, our disciplined investment approach is well suited to capturing the growing income thematic across Asia,” Ms Rahmani says.
Geoff Bazzan, head of Asia Pacific equities and co-portfolio manager for the new fund, says the team has been considering a dividend growth fund in Asia for some time.
“The Asia region is home to more companies with a net cash balance sheet than anywhere else in the world, and there are many companies across the region with the potential to significantly increase their returns to shareholders.
“As well as having the world’s strongest balance sheets, Asian corporates have typically adopted a more conservative approach to capital management, with an average payout ratio of 35 per cent, which is significantly below the global average.
“For the past few years we have been observing an increased focus by management teams in Asia to optimise returns to shareholders, with dividends playing a significant role. There are many companies across the region with the financial means to meaningfully improve their returns to shareholders with more pro-active capital management.
“By focusing on those companies with both the ability and intention to pay and sustain an attractive dividend profile, we believe we can offer a portfolio capable of delivering an attractive total return through the cycle with risk characteristics that are superior to that of the regional benchmark.”
Mr Bazzan adds that this is not simply a high yield strategy; rather the portfolio focuses only on those companies with the financial strength and discipline to sustain and grow dividends over time.
“Our proprietary quantitative screening process means we will only consider those companies that clearly satisfy either or both of our ‘intention’ and ‘ability’ thresholds on dividend payment.
“The focus on both the ability and intention to pay dividends is what differentiates the fund from many other high yield strategies that are purely driven by the absolute dividend yield. Our strict scrutiny with regards to balance sheet strength and cash flow generation will help to shield the portfolio from adverse impacts from changes in interest rates. We want to own those companies able to generate growth in dividends per share that will also support a multiple expansion.
“As well as the rigorous quantitative screening, our experienced team of analysts applies a qualitative overlay to all portfolio holdings including a thorough assessment of relevant ESG factors. Only those companies that satisfy both the quantitative and qualitative process are eligible for inclusion in the portfolio,” Mr Bazzan says.
The fund’s investment universe captures around 4,300 securities listed across the Asian region with a market capitalisation above US$1 billion dollars. The fund is benchmark unaware, comprising a high conviction portfolio of 25–40 stocks.
This material does not constitute investment advice or an investment recommendation of any kind and should not be relied upon as such. This information is general information only and it does not have regard to any investor’s investment objectives, financial situation or needs.