Investing for Income
The Harvest Income Strategy aims to deliver income to investors from a broad range of asset classes. The Strategy offers global exposure to equities, bonds and infrastructure combining the ability to trade freely with the availability of a reliable stream of income.
By diversifying across a range of asset classes, the strategy aims to lessen the impact of investment cycles on asset values to the extent that the different assets will not show a high degree of correlation.
Deriving Income from Multiple Sources
By providing the investor with access to income from a number of asset types, it not only diversifies the risk but it allows a mix of higher fixed rate income payments such as might be received from bonds and infrastructure investments, but also to income generating equities where the income is likely to grow over time. The chart below shows the level of income growth delivered by various equity markets over the past ten years.
Investing for Income
The investment objective of this strategy is to generate income via four funds providing daily liquidity, a global spread and offering exposure to a range of asset classes.
These asset classes should not have a strong correlation to each other through the investment cycles.
Base Currency – Euro
Total Net Assets – €5.5 BN
Annual Distribution Target (Net) – 5.0%
Liquidity – Daily
Performance of Strategy
Income Strategy (September 2023)
The past quarter has seen continued weakness in both bond and equity markets and this has been reflected in the capital value of the Income Strategy falling by 3.4% over the quarter. The situation has been exacerbated by international investors switching away from income products to cash because of the attractive deposit interest rates currently available. Over the coming year, we would expect this trend to reverse as interest rates peak and investors focus on the likelihood of rate reductions. Meanwhile, income levels from the strategy remain well above its longer term target level of 5% per annum.
The Importance of Investing for Income
Explicitly or implicitly, investment markets value all assets on their future ability to deliver income, over both the short term and the long term. Asset prices tend to rise with expectations that the outlook for future income deliverability has improved and of course the opposite happens when the outlook disimproves due to lower profitability or other factors. Even companies who pay no dividend and who may even be unprofitable can be valued quite highly if the market expects that the company will have the capacity to pay substantial dividends in the future.
For investors, the other important facet of income is that income paying assets tend to be considerably more stable than the average in volatile markets.
Other Investment Strategies Available from Harvest:
This marketing information has been provided for discussion purposes only. It is not advice, it is provided for general information purposes only and does not fully take into account your financial position, investment needs and objectives, attitude to risk, liquidity needs, capital security needs, capacity for loss, etc. It should therefore not be relied upon to make investment decisions. Prior to any formal investments taking place you will be provided with a detailed suitability letter taking into account all the above and outlining why the investment(s) are (not) suitable for you.
Warning Past performance is not an indicator or guarantee of future performance. The value of units in the strategy and income received from it can go down as well as up, and investors may not get back the full amount invested. Other charges and taxes payable by an investor may not be included in the figures.
Warning: If you invest in this fund you may lose some or all of the money you invest. Past Performance is not a reliable guide to future performance. This fund may be affected by changes in currency exchange rates. The value of your investment may go down as well as up. Income may fluctuate in accordance with market conditions & taxation arrangements.
Warning: The income you get from this investment may go down as well as up and the return may increase or decrease as a result of currency fluctuations.