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Income from Funds
david ogilvy
Posted: 03 July 2014 19:54:06(UTC)
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Dear All
What is the average percentage fall in income that you would expect from a mix of equity income and fixed income funds? Am I the only one who is experiencing a fall in income from a diversified portfolio?
Alan Selwood
Posted: 03 July 2014 21:59:12(UTC)
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I think you need to explain more clearly exactly what you mean (perhaps quote funds held or switched to/from, with cash value of amounts held in each?).

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david ogilvy on 04/07/2014(UTC)
Micawber
Posted: 04 July 2014 07:03:09(UTC)
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Yes, too vague. However:
As interest rates have remained low and monetary stimulus has been unprecedentedly vigorous, the yields on all income-producing assets have tended to fall. But their capital value at market has risen correspondingly. Your diversified portfolio should be showing the same characteristics, on average.

The equity element should also be showing the effect of growing company dividends which presumably you have taken out as annual income but which growth should nevertheless enhance the capital value to some extent.

I'm sure you can find a chart of the annual yield (i.e. dividends not total return) on the FTSE 100 over the past five years. It is now about 3.5%. As for fixed interest, try e.g. http://www.fixedincomein...=F629FC48&groupid=8 where you will see that the yield on 10 year gilts is about 2.75% compared with 4% five years ago.


david ogilvy
Posted: 04 July 2014 07:35:30(UTC)
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Alan Selwood;24776 wrote:
I think you need to explain more clearly exactly what you mean (perhaps quote funds held or switched to/from, with cash value of amounts held in each?).


Thanks. Have switched platforms and in first two months have experienced noticeable fall in income. Amounts of funds/units seem correct. Will investigate a bit further.
david ogilvy
Posted: 04 July 2014 07:37:06(UTC)
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Micawber;24778 wrote:
Yes, too vague. However:
As interest rates have remained low and monetary stimulus has been unprecedentedly vigorous, the yields on all income-producing assets have tended to fall. But their capital value at market has risen correspondingly. Your diversified portfolio should be showing the same characteristics, on average.

The equity element should also be showing the effect of growing company dividends which presumably you have taken out as annual income but which growth should nevertheless enhance the capital value to some extent.

I'm sure you can find a chart of the annual yield (i.e. dividends not total return) on the FTSE 100 over the past five years. It is now about 3.5%. As for fixed interest, try e.g. http://www.fixedincomein...=F629FC48&groupid=8 where you will see that the yield on 10 year gilts is about 2.75% compared with 4% five years ago.



Thanks. This confirms our understanding but we have switched platforms and seem to be experiencing greater falls than anticipated. Will investigate further.
Alan Selwood
Posted: 05 July 2014 09:04:37(UTC)
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Check that the dividends that should have been paid have actually been transferred to you when the shares/funds themselves were. It is possible that the move from old platform to new one has not been completed as far as dividends are concerned, or they may be in limbo in some form of platform suspense account while someone notices that they should be/should have been transferred on.

Worth going through every holding and its expected dividend dates, and check that all dividends have all been paid to you for all dates that might have been affected by the change of platform that you made (in terms of dividend paid re no. of shares/units held).

If all holdings and their associated dividends have been correctly accounted for, the next step is to look up each holding in turn on the websites of the companies/fund managers concerned, and check what the dividend per share/unit had been the year before and this year, and that the pence per dividend figures correspond with what you were paid, and at the same time you will see if some dividends have been reduced.

Finally, there is the point that those companies/funds that receive a lot of their dividend from overseas sources may have been affected in the last year by the strength of sterling. So even though the company may have declared a higher dividend in (say) US$ terms, the sterling equivalent may be lower! Shell and GlaxoSmithKline, for example, are likely to figure on such lists of rising dividends being worth less to a UK investor this time round.

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david ogilvy on 05/07/2014(UTC)
Ender mark
Posted: 13 April 2017 09:49:24(UTC)
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Joined: 17/03/2017(UTC)
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Income funds are a class of debt mutual funds that invest in a combination of government securities, certificates of deposits, corporate bonds and money market instruments. They are managed by expert fund managers who actively try to manage the portfolio based on interest rate movements, while at the same time keeping the portfolio credit worthy.
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