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Ready Made Income Portoflio

Investment discussion for beginners. Why you should invest your money, get help getting started
fca2019
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Ready Made Income Portoflio

#262967

Postby fca2019 » November 8th, 2019, 10:37 am

My current ISA/SIPP investments are mainly in accumulation growth tracker funds and blended funds (eg lifestrategy).

I have been thinking in future I could retire early or drop hours and possibly go to a income portfolio. I'd like a monthly income ideally.

I stumbled across Fidelity Multi Asset Income fund, OEIC, which has a 5 star Morningstar rating, aims to produce a yield 4-6%, ongoing charge 0.91%, bonds 53%, stocks 21%, other 26%. In this scenario I'd want to drawdown the dividends rather than reinvesting them.

Is this a good feasible alternative to constructing 15-20 investment trusts, or shares to get income. Any downsides to the off the shelf idea? Any alternatives to this or an IT portfolio? Thanks

Wuffle
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Re: Ready Made Income Portoflio

#263002

Postby Wuffle » November 8th, 2019, 1:12 pm

Kames' 'diversified monthly income' performs a similar task.
I read about it on here somewhere but can't credit the source.
Better or worse, dunno.

Itsallaguess
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Re: Ready Made Income Portoflio

#263005

Postby Itsallaguess » November 8th, 2019, 1:17 pm

Wuffle wrote:
Kames' 'diversified monthly income' performs a similar task.

I read about it on here somewhere but can't credit the source.

Better or worse, dunno.


Was it this post from EssDeeAitch that you remember?

I have similar needs to those you express here and I have some allocation to Kames Diversified Monthly Income

Geo spread: Europe 40% (UK 20%) | Asia 35% | Americas 25%

Asset type: Equities 54% |Bonds 20% |Other (specialist like infrastructure & property) 20% | Cash 6%

Yield: 5%


https://www.lemonfool.co.uk/viewtopic.php?t=16480#p204264

Cheers,

Itsallaguess

fca2019
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Re: Ready Made Income Portoflio

#263014

Postby fca2019 » November 8th, 2019, 2:19 pm

@itsallaguess, @wuffle Kames Diversified looks good as well - thanks

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Re: Ready Made Income Portoflio

#263061

Postby Backache » November 8th, 2019, 5:45 pm

fca2019 wrote:I stumbled across Fidelity Multi Asset Income fund, OEIC, which has a 5 star Morningstar rating, aims to produce a yield 4-6%, ongoing charge 0.91%, bonds 53%, stocks 21%, other 26%. In this scenario I'd want to drawdown the dividends rather than reinvesting them.

Must admit 'Aims to produce a yield of 4-6%' and having ongoing charges of 0.91% would have me a bit worried that I was either eating a lot of capital or had a lot of junk in my portfolio.

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Re: Ready Made Income Portoflio

#263070

Postby Backache » November 8th, 2019, 6:43 pm

Having had a quick look at the prospectus it looks like it aims to be very bond heavy, if you are taking early retirement and are looking for income for a long retirement you might well find that the income lags inflation over time.

TUK020
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Re: Ready Made Income Portoflio

#263111

Postby TUK020 » November 8th, 2019, 9:33 pm

fca2019 wrote:My current ISA/SIPP investments are mainly in accumulation growth tracker funds and blended funds (eg lifestrategy).

I have been thinking in future I could retire early or drop hours and possibly go to a income portfolio. I'd like a monthly income ideally.

I stumbled across Fidelity Multi Asset Income fund, OEIC, which has a 5 star Morningstar rating, aims to produce a yield 4-6%, ongoing charge 0.91%, bonds 53%, stocks 21%, other 26%. In this scenario I'd want to drawdown the dividends rather than reinvesting them.

Is this a good feasible alternative to constructing 15-20 investment trusts, or shares to get income. Any downsides to the off the shelf idea? Any alternatives to this or an IT portfolio? Thanks


Other key factor to consider is track record in increasing dividend yr to yr.
Worth comparing to CTY IT

fca2019
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Re: Ready Made Income Portoflio

#274752

Postby fca2019 » January 3rd, 2020, 8:28 am

@tuk020 would you combine city of london IT with other ITs, as only pays dividends quarterly? Thanks

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Re: Ready Made Income Portoflio

#274759

Postby Dod101 » January 3rd, 2020, 8:52 am

fca2019

If you are thinking of retiring early and supplementing your income from your investments, you may not find your solution by 'stumbling across' a suitable fund. Think carefully about what you want/need before doing anything about finding a suitable investment.

You need a steady and growing income. That probably means that you need to grow capital over time as well. Bond based funds may or may not do that but I think you will be better off with an equity based solution. That means not a fund producing its income from being 53% in bond holdings.

If you do not want or do not feel confident about going the full HYP route (see the appropriate Boards), then an equity fund based portfolio of funds is probably the way to go. There are many arguments for and against OEICs or investment trusts, but I would be looking at ITs. City of London would probably provide a suitable starting point for you but there are many other equity based income ITs. They will give you a hope of growing capital as well as increasing income. You need that to protect against inflation which, although very modest at the moment will one day raise its head again and you need to guard against that.

Dod

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Re: Ready Made Income Portoflio

#274778

Postby TUK020 » January 3rd, 2020, 9:57 am

fca2019 wrote:@tuk020 would you combine city of london IT with other ITs, as only pays dividends quarterly? Thanks

fca,
I would look at a basket of ITs for reasons of diversity and exposure to different parts of the world (search on Luni's B7 & B8 baskets).
I would not choose ITs in order to provide monthly income, but instead plan on using a cash buffer - main reason is to de-risk possibility of dividend cuts.
Probably run a cash buffer equivalent to one year's worth of fcst divis, take 85% of this buffer, paid out monthly, and increase payout as both buffer and divi level climbs.
tuk020

PS note Dod's input, I would second that


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