The benefits of Income Investing
To meet the different financial goals of a growing number of investors, investing for income has never been more important. In a world of shifting market dynamics and low interest rates, attractive sustainable income is also getting harder to find.
Income has always been recognised as a critical component of most investment portfolios. In addition to generating consistent income streams, the right mix of income strategies can provide investors with the potential for sustainable long-term growth.
By drawing on a diverse range of income sources, from equities and bonds to alternative investments such as real estate and infrastructure, asset managers can enhance portfolio diversification across asset classes and geographies, lowering overall volatility and providing smoother returns for investors.
Reasons to invest in income-generating strategies
- Income payouts
Potential to generate dependable cash payouts while enhancing total return over time
- Capital growth potential
The right blend of income-generating assets provide ample opportunities for long-term growth
- Diversification benefits
Uncorrelated sources of return can deliver important diversification benefits
Our Income Strategies
Threadneedle Equity Income Strategies
Equities continue to be a popular choice for investors. The broad range of businesses on offer and the familiarity of many of the companies make this market an attractive option for novices and highly sophisticated investors alike. However, in times of crisis, one key area of investor concern is on the ability of companies to pay a dividend.
As equity income investors, we prefer companies that can deliver stable and growing dividends over the medium to long term, and that can do so without compromising their balance sheet, the growth potential of the business or indeed their broader social impact. We believe that this approach will be able to deliver strong risk-adjusted returns for our clients across our wide range of global, regional and single country equity income strategies.
Threadneedle Fixed Income Strategies
Across the range of fixed income markets can be found a wide array of risk and return characteristics, from traditional asset classes of investment grade and high yield credit, through to more specialist areas that include emerging markets, securitised debt and social bonds.
The attraction of each area can change as economic and credit cycles progress. Our portfolio managers therefore pursue a flexible and dynamic allocation approach to enable them to seize investment opportunities as they arise, while minimising downside risks. Our proprietary risk rating system enables analysts to efficiently communicate an issuer’s risk profile and supports rigorous relative value debates that help portfolio managers to determine their final portfolio positions.
Threadneedle Real Estate Strategies
UK real estate remains a compelling asset class for many investors, with its asset-backed rental income currently providing an attractive annual yield of c5%.1 Returns from the asset class are traditionally dominated by income, which in a ‘lower-for-longer’ interest rate environment presents an appealing investment proposition.
Our approach has been built on buying assets that offer high, sustainable income yields, and actively managing those properties to maintain and grow rental income. Our UK Real Estate team is active in all market conditions across the full risk/return spectrum. This gives us visibility on the whole market, with a network of advisers covering all disciplines and locations providing a unique insight into occupational demand patterns, enabling us to track rental trends and identify value.
Threadneedle Multi-Asset Income Strategies
Investment returns from individual asset classes can vary significantly over time, with each asset class offering a different risk and return profile depending on the economic environment. By actively allocating across a mix of assets, the strategies managed by our multi-asset experts provide a ‘one stop shop’ investment solution for investors that can deliver attractive levels of income with less volatility than equities.
At a time where yields across many asset classes are low, our multi-asset income strategies can provide a well-diversified, cost-effective solution for investors seeking a good level of income while keeping volatility in check, irrespective of market conditions.
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Millions of people around the world rely on Columbia Threadneedle Investments to manage their money. We look after investments for individual investors, financial advisers and wealth managers, as well as insurance firms, pension funds and other institutions.
Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.