The income portfolio might be a bit of an adjustment for those who have become accustomed to some of the higher growth names covered at 5i Research but the intention is to provide a portfolio that is more concentrated on safety and income than growth and to act as an alternative to the model portfolio for those who may be more risk adverse.

The income portfolio strives to produce an attractive yield in the 4% to 5% range while not reaching for high yield and exposing investors to unnecessary risks. As a consequence of the yield being targeted, there will be some higher risk names in the portfolio but attempts to mitigate the risks have been made through diversification and weighting decisions. We expect a minimal return from capital gains, in the 2% to 3% range for a total return target of 6% to 8%. The portfolio also attempts to address rising interest rate concerns with a mix of fixed income products and dividend growth companies while not sacrificing income at the expense of this protection.

We are excited about the new portfolio but caution past members who enjoyed a 47% return over the last year (March 2013 – March 2014) with the original model portfolio to temper expectations as this version is simply not built to perform in the same manner. Also, for members that hold the few companies that overlap between portfolios, we would not ‘double-up’ on the holdings, as it would likely create too large of a position in your total portfolio. Make sure to check out the Income Portfolio as well as recent changes to the Model Portfolio and look through the Q&A section if you have any questions, as we have already addressed various questions and comments.