Legg Mason Global Asset Management announced earlier this week the launch of the Legg Mason US Equity Income Fund, a UK sub-fund designed to ‘exploit the growing propensity of US companies to pay and raise dividends’.
The fund, managed by ClearBridge Advisors, Legg Mason’s largest US equity subsidiary with $58 billion (€42.2 billion) under management, aims to generate sustainable income by investing in high quality companies that are currently paying an attractive dividend yield and have the capacity to grow their income stream over time.
Managed by Hersh Cohen, ClearBridge CIO, Michael Clarfeld, managing director and portfolio manager, and, Peter Vanderlee, managing director and portfolio manager, the fund will be closely aligned with the $4billion US Equity Income Builder strategy managed by the team.
The UK fund is expected to have similar holdings. Among the current top ten holdings of the US Equity Income Builder strategy are Proctor & Gamble, which has raised its dividend for 55 consecutive years, with rates rising 11.3% per year over the past five years; Kimberley-Clark, currently yielding 4.2%, which has raised its dividend every year since 1972; and Microsoft, a more recent dividend payer whose last dividend increase stood at 25%.
The fund, which will distribute dividends on a quarterly basis, targets a yield of 100-150 bps over its benchmark, the Russell 3000 Value Index. Share classes will be available hedged to sterling. The annual management charge is 1.5%.
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