Income investing is increasingly becoming a priority for institutional investors, especially from a DB and DC perspective, with the evolution of this offering coming as a result of the current macroeconomic climate and the growing need for sustainable income.
Investors are therefore looking at all types of income investing to provide diversification and generate return, without having to be as concerned about managing risk.
Although many income funds state they provide yields of 4-5%, the question is whether these funds are able to maintain and can continue to deliver this level of return, and whether there are actually other types of income investing asset classes that investors should be considering as well.
This approach has been extremely popular in the US and we can expect this development to be mirrored in the UK, both in terms of the needs of investors and the provision of these types of funds. In addition, going forwards, some may view income investing as a viable alternative to an annuity, as the DC market continues to evolve.
Ultimately, arguably from an investment perspective, the bottom line is that while we remain in the current climate, there is still very much a need for income investing to help generate capital growth at a reduced level of risk.
CAMRADATA’s Roundtable focussed on the opportunities offered by income investing and investigated what the future holds for this asset class, both in this current macroeconomic climate and going forwards.
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