Perennial Value Management has broadened access to its Wealth Defender Equities offering, aimed at providing additional self-directed investor and in particular SMSF member appeal for the product via a listed investment company (LIC) structure.
Wealth Defender Equities Limited has been released to the market eight months after the Perennial Value Wealth Defender Australian Shares Trust was launched to provide access to the investment process for people preferring to invest directly via the Australian Securities Exchange.
“A lot of that world was asking us would we consider offering something like this because we’d already developed the expertise,” Perennial Value Management managing director John Murray said.
In addition, recent conversations with financial advisers had revealed that while 10 years ago their entire portfolios were being allocated to unit trusts, today, for varying reasons, half of their clients were looking to invest via listed stocks, Murray said.
“So we were looking at that sort of feedback and it was sitting in the backs of our minds awhile so we decided to get on with it.”
He said the new LIC had additional appeal to SMSF members as it could provide a yield solution they were seeking and would assist in creating greater portfolio diversification as well.
“We expect this LIC to provide at least a market yield with a very, very high to 100 per cent franking credit and we would expect dividend growth over time as well,” he said.
“Also, at a time when self-directed investors are predominantly [overweight] in top 20 stocks with a big weighting in banks, a big weighting in Telstra and perhaps two or three other stocks, we’ve got an ex-top 20 bias to the overall [LIC] portfolio.
“We’ve had nice feedback from investors, brokers and advisers saying it’s very complementary and provides something different on that focus alone.”
Like the Wealth Defender Australian Shares Trust, the LIC provides a capital protection component specifically designed to limit the downside effects of zero to minus 20 per cent market falls.
The initial public offer for the LIC opened on 27 March and closes on 5 May, with Perennial Value Management looking to raise a minimum $50 million in capital and a maximum of $160 million.