BetaShares has launched its Global Income Leaders ETF, providing SMSF investors with exposure to a diversified portfolio of 100 companies, ex-Australia.
BetaShares chief executive Alex Vynokur said income-oriented Australian investors, particularly SMSF trustees, retirees and those nearing retirement, will find the fund, known as INCM on the Australian Securities Exchange, attractive for a core allocation to international shares.
“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 four banks and big miners,” Vynokur said.
“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.”
The new ETF aims to track the NASDAQ Global Income Leaders Index, which applies a dividend-yield weighting methodology.
It allots a larger weight to companies with a higher dividend yield, while the methodology also includes screening criteria that seek to select companies with ongoing income potential.
Index weights are modified to ensure regional representation is generally in line with broad global benchmarks.
As at 30 September, INCM’s index had a 12-month trailing dividend yield around 4.5 per cent a year, compared to the S&P/ASX 200 Index dividend yield of 4.2 per cent a year.
Over the 10-year period to 30 September, the index tracked by INCM had a compound return of 10.8 per cent a year versus a total return of 9.7 per cent a year 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,” Vynokur said.