BetaShares has launched the Global Income Leaders ETF (INCM), providing Australian investors with exposure to a diversified portfolio of 100 global companies (ex-Australia) which are selected for their potential to generate attractive and persistent income.
INCM offers Australian investors with a cost-effective way to expand the world of income opportunities in their portfolios as well as benefit from the diversification benefits that come from global shares.
BetaShares Chief Executive Officer, Alex Vynokur, says: “Most Australian investors understand that investing in global markets is a great way to diversify portfolios, particularly with the high levels of exposure that most Australian share portfolios have to local companies like the Big 4 banks and big miners. However, investors who desire such international diversification typically find that they generally have to accept a lower level of income when investing in global shares. INCM has been built to meet that challenge.
“INCM provides Australian investors exposure to a carefully screened portfolio of global companies with attractive income potential,” he adds.
The new ETF aims to track the Nasdaq Global Income Leaders Index, which employs a dividend yield-weighting methodology, and so assigns a larger weight to companies with a higher dividend yield. The methodology also includes a set of screening criteria which aim to select companies with persistent income potential. Index weights are modified to ensure that regional representation is generally in line with broad global benchmarks.
As at 30 September 2018, INCM’s Index had a 12-month trailing dividend yield of approximately 4.5 per cent pa, which compares favourably with that of the S&P/ASX 200 Index whose dividend yield at the same date was 4.2 per cent pa.
INCM’s Index has also shown favourable long term total return performance compared to traditional global benchmarks. Over the 10-year period to 30 September 2018, the index tracked by INCM had a compound return of 10.8 per cent pa vs. a total return of 9.7 per cent pa for the MSCI World Index.
“Although INCM does have an income focus, investors are still able to benefit from the capital growth potential of the companies which the Fund owns,” says Vynokur.
“We believe that income-oriented Australian investors, especially SMSF trustees, retirees, and people approaching retirement, will find that INCM is a compelling option for a core allocation to international shares,” he adds.