R14 billion Absa Dividend Income Fund attractive under current market conditions

The Absa Dividend Income Fund, which is targeted at tax sensitive investors who seek a high level of income – primarily in the form of dividends – has enjoyed exponential growth since the formation of Absa Investments in late 2005.

The Fund currently stands at R14.4 billion in assets under management.

“In the last three years, the Fund has quadrupled in size", says Alan Miller, Managing Executive of Absa Investments.

Adds Miller: “With the Fund currently offering a net after-tax return of over 9% per annum to retail investors, it provides an attractive investment solution given current market circumstances.”

He explains that the Fund has benefited from the high South African interest rate environment in terms of the attractiveness of its yield relative to other asset classes.

As one of the largest funds of its kind in the South African collective investment market, the Absa Dividend Income Fund has a similar risk profile to that of money market unit trusts, with a key differentiating characteristic of the Fund being the tax-efficient nature of its dividend distributions.

The Absa Dividend Income Fund invests in securities with a minimum credit rating of A1.

Liquidity of the Fund is ensured because it has an optimal split between institutional and retail investors, with the latter being able to access their money within 48 hours.

Retail investors can invest in the Absa Dividend Income Fund from a minimum lump sum amount of R25 000.

The Fund is managed by Greg Kettles, who is a Chartered Accountant and Chartered Financial Analyst. Kettles has 14 years of investment experience.