Tony Yarrow of Wise Investments has made some changes to his hypothetical £100,000 income growth portfolio.  

On 28 April, he reduced his stake in Investec Emerging Markets Debt fund by 25 per cent and sold his holding in Schroder Income Maximiser in its entirety.

His reason for the first switch is because he believes that conventional bonds are currently overvalued, though he still feels there are opportunities globally - and has therefore not sold out completely, but he believes there is better value in equities.

However he has decided to sell the Schroder fund as it is not invested in the type of companies he prefers. With the money raised he has increased his stakes in ISIS Property and Jupiter Japan Income and added a new holding.

The ISIS Property trust was on an 8 per cent discount to net asset value, which he believed gave him an opportunity to buy at a bargain price. Similarly, after the disasters in Japan, he felt the valuation of the market there was compelling.

His newly acquired holding is the Invesco Income Growth Investment Trust managed by Ciaran Mallon, which shares many of the characteristics of the Edinburgh Investment Trust, managed by Neil Woodford, but was available on a 9 per cent discount.

These changes are reflected in the online portfolio here.

For more details on the income growth portfolio, and to read Yarrow's full quarterly commentary, don't miss the June issue of Money Observer, out on 26 May.