The Merlon Australian Share Income Fund (Fund) managed by Sydney-based Merlon Capital Partners has joined elite company after receiving a Highly Recommended^ rating upgrade from Zenith Investment Partners.
In its latest ‘Sector Report, Australian Shares Large Companies’, Zenith singled out the Fund – which offers investors an income-focused, Australian large cap equity exposure with an active derivative overlay – for high praise.
“Zenith believes the Fund is a compelling offering due to its fundamentally driven investment process and tailored use of derivative strategies, which balances meeting income objectives and providing long-term capital growth. The Fund is one of Zenith’s preferred options within the Australian equity income peer group,” the report said.
Out of the 126 strategies covered by Zenith only 17, including the Merlon Australian Share Income Fund, have received its highest conviction Highly Recommended rating in 2021.
Merlon’s principal and lead portfolio manager Neil Margolis said the upgrade was recognition of the dedication and discipline of the team in following Merlon’s proven, transparent investment process. “The upgrade is even more pleasing when you consider that only three upgrades were awarded in the 2021 Sector review and the Merlon Australian Share Income Fund was the only addition to the Highly Recommended category,” he said.
Merlon’s investment philosophy is based on the premise that quality stocks trading below fair value, as measured by sustainable free cash flow yield, will outperform over time. Merlon also considers the benefits of franking credits in their stock valuations.
The Fund has delivered 7.9% p.a. gross distribution yield (inclusive of franking credits and after fees)* over the last 10 years to 30 June 2021.
Merlon Capital Partners is supported by Challenger Limited subsidiary Fidante Partners, which forms long term alliances with talented investment teams to support and grow specialist investment management businesses.