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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?
The amount of income paid is dependent upon the dividend stream from our investments (which fluctuate on a monthly basis) and the option premiums collected quarterly (which vary according to market conditions). We smooth the monthly pay out to provide a steady income stream to the unit holders, but there should be no guarantee of achieving the target yield of 5%.

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.

The use of ‘covered calls’ may typically be 20%, however it is not limited to this level.

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 Funds Prices, Performance and Documents Tool where you can find Factsheets, Key Features and Past Performance data for our Funds.

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