An attractive option for income investors who crave consistency
In markets anything is possible, but it is hard to see how 2023 is not going to be a challenging year for global equities. That’s especially true in the US where shares are expensive, interest rates are going up, and corporate earnings are under pressure.
It makes even more sense than usual for investors to use any sensible source of return available to them. In terms of component of return, that means leaning on income as well as capital growth. After all, last year was a reminder that capital growth can be negative.
For many investors, dividends are the key income source. But dividends are not bullet proof. Companies can cut dividends to shore up balance sheets when earnings are weak. Regulators can interfere with them when they see systemic risk.
So how can you navigate difficult conditions, generate income and even enjoy the journey?
We believe the answer lies in our process and outcomes:
- Consistent long-term returns with high income from a differentiated source via our unique implementation process.
- Substantially lower volatility than the market.
- An attractive risk profile, capturing most of the market’s upside and less of its downside. With the added benefit that we can take advantage of weaker conditions.
- Quarterly distribution payments.
- A high conviction value portfolio of global equities that are diversified across region, sector, style and return type.
Over the last 10 years, the Talaria Global Equity Fund (Managed Fund) has delivered an average annual total return of 10.60%, including 9.17% in distributions.
As we look ahead to 2023 and into 2024, we believe equity investors should prize income, good value, short duration, and rapid payback periods.
For example, look at large-cap healthcare stocks. In particular, pharmaceutical majors remain attractive, while outside the dominant and expensive US market, the rest of the world offers value.
No one can predict the future but whatever happens, we can be sure that income will always play its part.
A little certainty can be empowering, especially in uncertain times
For over 17 years Talaria has been delivering a greater certainty of returns through its unique and alternative approach to global equity investing, with over 9% p.a. average income distribution for the last 10 years, low volatility and lower market risk.
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Chad is the Co-Chief Investment Officer and co-founder of Talaria Asset Management. He has more than 21 years of experience in the financial services industry in the UK, South Africa and Australia. Talaria's investment strategy seeks to increase...
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