A lot of retiree or older investors will be looking for income and the more the better in today’s ultra-low rate world.
After all if you’re in retirement you’ll want income today to meet your everyday expenses or perhaps pay for the odd overseas holiday.
The more regular the income the better as this should help to manage expenses and cash flows.
The Plato Income Maximiser Fund (ASX: PL8) is an exchange traded actively managed fund (structured as an LIC) run by Don Hamson’s Plato Investment Management.
Moreover, it pays income monthly income distributions and managed to dish out 12 fully franked 0.5 cent per share dividends over the past 12 months. On a $1.13 share price that equals a yield of 5.3% plus the benefits of full franking credits to take the gross yield to around 7.6%.
It also managed to dish out a special 3 cents per share dividend over the period to take the yield to an impressive 8% and 11% respectively.
The special dividend was in part possible due to the off-market buy backs offered by the likes of BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) in 2019. These were in part to distribute franking credits ahead of an expected May 2019 Labour federal election win.
The fund has a focus on distributing franking credits to investors so would particularly suit investors in the retirement stage eligible to claim cash refunds.
The fund also holds popular shares like Magellan Financial Group Ltd (ASX: MFG) and has ridden the gold miners like Regis Resources Ltd (ASX: RRL) and Northern Star Resources Ltd (ASX: NST) higher over the past year.
This month Plato is also looking to raise another $200 million to meet the rising demand for income, with existing investors offered the opportunity to buy 1 new share for every 1.6 share held at an offer price of $1.10.
Any shares not taken up by existing investors will become available to new investors, who can also simply buy on market using a common trading platform such as Commsec for example.
Given the pathetic term deposit rates today it makes sense for income seekers to take a look at a fund run by one of the local share market’s most experienced players.
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.