​SMSF demand for $1b fund

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The Grant Samuel Epoch Global Equity Shareholder Yield funds have surpassed the $1 billion mark in assets under management, and around 20% of the funds’ net cash-flows are from SMSF investors.
The fund has more than doubled in size over the past 12 months, says Andrew McKinnon, CEO of Grant Samuel Funds Management, an independent investment advisory house.
The funds are managed by New York-based global equity manager, Epoch Investment Partners, after it was launched to retail investors in Australia in May 2008 during the GFC.
Epoch CEO and co-CIO William Priest said the key to producing large risk-adjusted returns is to focus on companies generating free cash flow.
“This strategy identifies companies that return approximately 6% of their market capitalisation to shareholders on a per annum basis in the form of cash dividends, share buybacks and debt reductions as well as possessing an annual underlying growth rate of free cash flow of at least 3%.”
These distributions are characterised as “shareholder yield” which represent capital returned to shareholders, he says.
According to McKinnon, the funds are unique in the Australian market place because of this.
“The funds are attractive because they offer lower volatility than most equity products and distribute high levels of income. This has proven to be of great interest to SMSF investors who desire capital growth with substantial income as an investment objective.”
This fund provides income on a quarterly basis, which appeals to superannuates and retirees drawing down a portion of their allocated pensions.
“About 20% of the funds’ net cash-flows are from SMSF investors,” McKinnon says.
The $1 billion FUM milestone comes after Grant Samuel decided to open offices in Perth last year, increasing its business.
The fund is on the platforms of all the major banks and life insurers.

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