Talking Point  

Building a defensive income portfolio

  • Describe some of the problems with equity income
  • Identify some options, as alternatives to equity income
  • Explain some of the risks with alternative income-producing asset classes
CPD
Approx.30min
Building a defensive income portfolio
Where to look for income in difficult times
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As the economies around the world start to teeter on the edge of recession, income investors are wondering where to put their money.

Investors have been leaving equity income funds in their droves, as many typical big dividend payers suspend or cut their dividend.

So where does an investor look for income, if he or she is preparing for a serious bear market?

There are alternatives to the conventional sources of income: investment trusts, infrastructure and bonds are several worth looking at.

But there is no easy answer, as they all have caveats, even if they provide an option in the current situation.

This report explores some of the options available to clients, and the advantages and disadvantages of each.

It is worth an indicative 30 minutes' CPD.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Why did the banks have to cut their dividends?

  2. What is a major drawback with getting income from investment trusts?

  3. Yilds from overseas equities tend to be higher than with UK stocks, true or false?

  4. Why are property trusts struggling?

  5. What is the main drawback with corporate bonds?

  6. Strategic bond funds hold no option in difficult times, true or false?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe some of the problems with equity income
  • Identify some options, as alternatives to equity income
  • Explain some of the risks with alternative income-producing asset classes

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