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Enhanced Income Portfolio

This Fund strikes the balance between an enhanced level of income, without sacrificing the potential for capital growth. Here are some of the key features of our Enhanced Income Portfolio, and why we think you should invest with us:

Fund objective
Pay out an enhanced level of income, without guarantees, as well as to provide growth prospects over the longer term.

Who is the Fund suitable for?
This Fund is suitable for clients who are:

  • Seeking a potentially higher income, with a target yield of 5%
  • Comfortable with the use of derivatives
  • Prepared to accept a moderate level of volatility
  • Investing for the longer term (at least five years)

Target income yield
This Fund has a target income yield of 5%.

How is income paid?
Income is paid monthly, and it is smoothed. This means that your client will know each year in advance how much income they will receive for the first 11 months of the year, and then we will adjust the amount of income they receive in the twelfth month (either up or down) to reflect actual returns.

Why recommend the Enhanced Income Portfolio?

  • The Fund has a strong risk-adjusted performance history, which is mainly attributable to investment manager performance rather than moves in the market.
  • Unlike competitor funds, we limit the use of ‘covered calls’ so that there is a healthy balance between an enhanced level of income and protection against volatility while still achieving some capital growth.
  • We have one of the most cost-effective investment strategies in the market, as well as one of the most transparent charging structures.
  • The Fund is actively managed by an experienced investment team with a strong performance record.

How is the Fund invested?
The Fund invests in much the same way as the Equity Income Unit Trust. The Fund Manager may invest more in higher-yielding stocks, and the Fund also makes use of a type of derivative called a ‘covered call’. This method of investing allows the Fund Manager to lock into a guaranteed level of income payment upfront. This may mean missing out on some capital returns should the market then do really well. Equally, though, capital is also protected from market downturns.

The use of ‘covered calls’ is limited to around 20% of the Fund so that capital growth is not sacrificed.

What are the charges?
A low-cost, transparent charging structure, with an annual management charge of 0.5% and an estimated ongoing charge of 0.6%.

Find out more
If you would like more information on the Enhanced Income Portfolio, please visit our Product Literature pages, where you will find a Fund Factsheet, Key Features of the Fund and Past Performance data. 

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