Contango Income Generator

About this Fund

Fund Detail

FUND MANAGER Contango Asset Management
INVESTMENT STYLE CIE is an income-focused, ex-top 30 listed investment company.
INVESTMENT PROFILE CIE aims to distribute 6.5% of NTA per annum (paid quarterly), with dividends to be franked where possible.
FEES 0.95% p.a. of the Portfolio Market Value



Benefits of investing in CIE

  • Access to a specialist investment manager with significant experience and expertise in Australian equities and the management of listed investment companies;
  • Investment in a portfolio of sound, higher yielding ASX-listed Australian shares, with an emphasis on companies that will grow their dividends and franking accounts over time;
  • Investment in a company with a dividend policy to pay a minimum of 6.5% per annum of the Company's NTA value per Share;
  • Those benefits which come through investing in an ASX listed investment company structure, including being a cost effective way to maintain a high degree of investment control through regular communications and operational transparency;
  • Investment in a company with a clear investment strategy, which has been successfully employed by the Investment Manager since 2012;
  • Research driven investment process and portfolio management techniques of the Investment Manager. While noting that past performance should not be relied upon as an indication of future performance, using the strategy that it proposes to use in respect of the Company's Investment Portfolio, the Investment Manager has, from the inception of the Income Generator (ex-30) Strategy Fund in December 2012 through until 31 May 2015, generated a return (net of fees and expenses) of 20.7% per annum, which compares favourably to the ASX All Ordinaries Accumulation Index return of 14.2% per annum in the corresponding period;
  • Oversight by a Board with strong experience in capital markets, corporate governance and investment, with a focus on cost control and efficiency;
  • Investment at a time where income focused investment products are strongly demanded, especially by self-managed super funds; and
  • Flexibility and control by investing in an investment that can be bought and sold on ASX.




Key Features

About the Fund

Contango Income Generator Limited (CIE) is an income-focused, ex-top 30 listed investment company. CIE's stated objective is to distribute 6.5% of NTA per annum (paid quarterly), with dividends to be franked where possible.

CIE's investment manager focuses on selecting those companies that provide a consistent and growing source of dividends. CIE is characterised by a strong and diverse portfolio of companies outside of the ASX top-30 that exhibit sustainable cashflows and strong business models.

About Contango

Contango Asset Management Limited (ASX:CGA) is a financial services company with a marketing and distribution platform that partners with, and promotes, high quality fund managers to the self-directed and Independent Financial Adviser (IFA) channels of the $2 trillion superannuation industry.

With a current investment focus on Australia for income and global for growth, Contango Asset Management manages the ASX ex-30 dividend income strategy, Contango Income Generator Limited (ASX:CIE), and the large cap global equities strategy, WCM Global Growth Limited (ASX:WQG). WCM Global Growth's portfolio manager is US based WCM Investment Management.


How we invest your money

The Company's investment strategy is to construct a diversified portfolio of listed investments in Australia, using a disciplined investment process implemented by, and using the experience of, the Investment Manager.

In this respect, the Company, through its Investment Portfolio, will provide investors with access to the returns of a portfolio of listed entities predominately within the S&P/ASX 300 Index, excluding the securities of the 30 largest entities (by market capitalisation) included in the S&P/ASX 300 Index. The Investment Portfolio will have a particular focus on those entities which the Investment Manager expects will pay higher levels of dividends (and/or distribute higher levels of franking credits) over time.

The Investment Manager is a top down business cycle' manager. It believes that a detailed understanding of global and domestic economic conditions and how those considerations impact on financial markets is important in determining which sectors and stocks will outperform the market.

The top-down approach of the Investment Manager is complemented by a disciplined bottom up' stock selection process, which involves rigorous quantitative and qualitative fundamental analysis in respect of each of the stocks identified for potential investment. This includes detailed stock modelling, in depth company research notes and reports complimented with management meetings. When constructing a diversified portfolio, the Investment Manager also considers the portfolio's overall risk positions including stock, sector and thematic risks.

The Investment Portfolio will typically be comprised of securities in 30-40 companies which demonstrate:

  • higher than market yield;
  • sustainable dividend growth and payout ratios;
  • lower than market beta' / risk profile;
  • low earnings volatility; and
  • balance sheet strength.

Asset allocation

(Investment type: Range / Target)

  • Cash: 0-50% / 5%
  • Securities of entities listed on ASX and included in the S&P/ASX 300 Index, but excluding those entities ranked in the top 30 on ASX (by market capitalisation): 50-100% / 90%
  • Securities of other ASX listed entities (which may include ASX Top 30 entities and entities outside the S&P/ASX 300 Index): 0-20% / 5%

The key dependencies underpinning the Investment Manager's investment strategy for the Company are the research, analysis, skill and experience of the Investment Manager as well as market conditions.

While, at a maximum, 50% of the Investment Portfolio may be held in cash and cash-like investments, the Directors currently expect that the Company's holdings of cash and cash-like investments will not normally reach this threshold. Rather, it is the current expectation of the Directors that the Company's holding of cash and cash-like investments will materially exceed the Target' allocation (i.e. 5%) generally only in circumstances where the Investment Manager believes that the risks, including market or systemic risks, to the overall value of the Investment Portfolio justify an increase in the cash and cash-like investments in order to appropriately protect the Investment Portfolio.