Hotel model portfolio - balanced income, medium risk

Who is it for: 
  • Investors looking for a good income from their capital, with the potential for some growth in their income and 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 looking for a balance between income and capital growth.
  • May also appeal to investors approaching retirement who can opt to reinvest their dividends until required.
What it looks like: 
Fund Role in portfolio
Artemis Global Income Invests in strong companies globally for income, has low UK content. View Factsheet
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
Invesco Perpetual Income Solid UK equity income performer. View Factsheet
Newton Global Income Good long term record of investing for income using company’s global thematic approach. View Factsheet
Premier Multi Asset Monthly Income Fund of funds invested across a broad range of asset classes. 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 a fixed income and a multi asset holding – Baillie Gifford Corporate Bond and Premier Multi Asset Monthly Income. The latter’s fund of funds approach helps provide the portfolio with extra diversification.

As its core equity holdings, the portfolio holds three middle-of-the-road UK income stalwarts. There is City of London, an investment trust with a history of increasing its annual dividends for nearly 50 years, plus Invesco Perpetual Income and Threadneedle UK Equity Income, both steady past performers. To give investors exposure to overseas markets, there are also two global equity income funds with good track records – Artemis Global Income and Newton Global Income.

* 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: 

2016

  • Sell Fidelity Strategic Bond

    Potentially rising interest rates make bonds less attractive.

  • Buy Premier Multi Asset Monthly Income

    More scope for growing income across a range of asset classes.

2015

  • Sell Fidelity Moneybuilder Income

    Falling yields making this area less attractive.

  • Buy Fidelity Strategic Bond

    Provides greater flexibility to invest in different types of bonds.

  • Sell Sell M&G Optimal Income

    Falling yield has made fund less attractive for income seekers

  • Buy Baillie Gifford Corporate Bond

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

  • Sell Liontrust Income

    Change of objective from UK to global income and disappointing returns.

  • Buy Newton Global Income

    Provides international diversification and benefits from solid past performance record.

2014

  • Sell Schroder Global Equity Income

    Change of manager

  • Buy Artemis Global Income

    Good international diversification with low exposure to the UK.

2013

  • Sell Trojan Income

    Soft closed to new investors.

  • Buy Liontrust Income

    Appears well suited to benefit from rising equity markets.

  • 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.

  • Sell Murray International

    Premium to net asset value too high making it unattractive to new investors.

  • Buy Schroder Global Equity Income

    Invests internationally in solid companies with stable business models.

2012

  • Buy Fidelity Moneybuilder Income

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

  • Buy Invesco Perpetual Income

    Solid UK equity income performer

  • 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 Murray International

    Provides global diversification with significant exposure to Asian and emerging market equities.

  • Buy Temple Bar

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

  • Buy Trojan Income

    Aims to provide steady growth and income by investing in reliable companies.

Last updated: 
13 October 2016