Golf model portfolio - immediate income, medium risk

Who is it for: 
  • Investors looking primarily for a high starting income and to maintain the value of their capital.
  • However, investors must be able to afford for their income to fall and to lose some of their capital under a worst case scenario.
  • May be suitable for retired investors seeking to maximise their income who are not so concerned about their income increasing over time.
  • May also appeal to investors approaching retirement who can opt to reinvest their dividends until required.
What it looks like: 
Fund Role in portfolio
Ballie Gifford Corporate Bond Invests in different types of corporate bonds to generate a high monthly income. View Factsheet
City of London Invests mainly in well-known blue chip UK-listed companies and has been increasing its annual income for nearly 50 years. View Factsheet
Picton Property Income Trading on a more reasonable premium of around 2 per cent compared to its predecessor F&C Commercial Property. View Factsheet
Invesco Perpetual Income Solid UK equity income performer. View Factsheet
Schroder Income Maximiser Produces an enhanced income by selling options on its underlying share portfolio. View Factsheet
Threadneedle UK Equity Income A stalwart UK equity income fund. View Factsheet
Why were these funds selected: 

In order to provide investors with a regular basic monthly income as well as some capital security, this portfolio has two fixed income holdings – Baillie Gifford Corporate Bond and Invesco Perpetual Monthly Income Plus, the latter also has some equity content for growth. There are then two income stalwarts – City of London, an investment trust with a history of increasing its annual dividends for nearly 50 years, and Threadneedle UK Equity Income, a steady past performer.

Schroder Income Maximiser gives the portfolio’s income a boost through its options strategy although its growth can be more erratic short term. F&C Commercial Property has been replaced by Picton Property Income, which is trading on a much more reasonable yield of 2 per cent.

* Charts show bid-to-bid performance with income reinvested.

Please note that past performance is not a guide to future performance. Fund performance data does not take into account fees and expenses which are specific to individual plans.

Please be aware of the risks involved. Money Observer does not provide investment advice. You should choose investments to suit your personal circumstances and attitude to risk. If you are at all unsure you should seek advice.

Where to get it: 

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Timeline: 

2017

  • Sell F&C Commercial Property

    Premium too high

  • Buy Picton Property Income

    Much more reasonable premium of 2 per cent compared to its predecessor.

2016

  • Sell Henderson UK Property

    We feel it would be highly advantageous to hold our property exposure in a closed-ended fund.

  • Buy F&C Commercial Property

    Provides attractive source of income and has strong performance record.

  • Sell Temple Bar

    Contrarian approach has produced disappointing capital performance.

  • Buy City of London

    Conservatively managed UK large cap fund with long record of dividend increases.

2015

  • Sell Fidelity Moneybuilder Income

    Falling yields making this area less attractive.

  • Buy Baillie Gifford Corporate Bond

    High yielding, strategic, go-anywhere fund with greater scope to adjust to changing circumstances.

2014

2013

  • Sell M&G Optimal Income

    Falling yield has made fund less attractive for immediate income seekers

  • Buy Henderson UK Property

    More attractive yield and scope for income and capital growth.

  • Sell M&G Corporate Bond

    With outlook for equities improving, this fund sold to reduce bond exposure.

  • Buy Threadneedle UK Equity Income

    Provides better income growth potential than bonds, and prospect of capital gains.

2012

  • Buy Fidelity Moneybuilder Income

    Provides exposure to high-quality investment-grade bonds for security of income and capital.

  • Buy Invesco Perpetual Monthly Income Plus

    Invests mainly in bonds, but can hold up to 20 per cent in equities.

  • Buy M&G Corporate Bond

    Provides exposure to high-quality investment-grade bonds for security of income and capital.

  • Buy M&G Optimal Income

    Strategic, go-anywhere bond fund.

  • Buy Schroder Income Maximiser

    UK equity income fund with enhanced yield from sales of options.

  • Buy Temple Bar

    Invests mainly in large blue chip companies and has long record of growing its income.

Last updated: 
1 July 2017