The Requirement for Income Solutions
Lewis Brasseaux at Aspen explains:
There are several recent factors that have increased the attractiveness of income paying portfolios as an option for clients. This short piece considers the current state of affairs and outlines what Aspen offer by way of a solution.
Firstly, the UK population is undergoing a significant demographic shift, with an increasing proportion of people entering retirement. The investment landscape has also changed as we have seen the rise in Defined Contribution pensions and increased reliance on private pensions and investments. In our opinion, as more
people enter retirement and begin drawing from their pensions, there may be a growing demand for stable income solutions. Investment portfolios designed to provide consistent income, could play a crucial role in supporting retirees through their later years.
Secondly, given that pensions will no longer offer full IHT protection, individuals may need to reconsider their approach to retirement income and wealth transfer. Rather than preserving pension wealth for inheritance purposes, many may find it more tax-efficient to draw down income from their pension.
Finally, after years of ultra-low interest rates these are now back to more meaningful levels and bond yields have followed suit. Therefore, rather than the need to increase risk in portfolios in order to capture better yields, by increasing equity or high yield exposure for example, decent income producing options can now be found across the fixed income asset class.
Aspen offers a wide range of solutions for clients seeking income from their investments. Beyond selling down capital in a capital accumulation focused core, passive focused, or sustainable portfolio, Aspen provides seven unique, income-focused models.
Aspen Income Range
This suite of five portfolios, spanning five risk profiles (from low to high), allows clients to leverage Aspen’s investment expertise in an income-focused vehicle. With an expected yield of 4%, these portfolios are wellpositioned to support clients in drawdown or decumulation. Income is distributed through the use of income share classes.
High-Income Portfolio
Designed for clients seeking higher yields, this medium-risk portfolio has a historic yield of 5.5%. It is constructed using a blend of high-yielding equity, fixed income, and alternative investments.
Cash Plus Portfolio
The Cash Plus portfolio aims to provide returns, net of fees, close to prevailing interest rates while prioritizing capital preservation. It is designed for investors seeking a liquidity-based solution, offering a historic yield of 4.4%—a compelling option for clients with cash or income needs.
For more information please contact lewis.brasseaux@aspenadvisers.com