Income Portfolio
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Without using annuities, what is the most kick ass income portfolio some of you guys are building right now?
Say the client had both qualified and non-qualified accounts, what are you using and what is the yield you are getting? It doesn't have to be pure bond income either, for instance I've been using hybrid UIT's for a portion. What's the breakdown generally of investment grade vs. high yield etc?What a great question.
I've been looking for bonds all day, need to go out further than i am willing, to get any kind of respectable yield on a decent credit[quote=Sportsfreakbob]What a great question.
I've been looking for bonds all day, need to go out further than i am willing, to get any kind of respectable yield on a decent credit[/quote] I don't want individual bonds. I want UIT's, mutual funds, ETF's, and hookers.Hookers generally lower the effective yield of an income portfolio (due to high expenses).
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We offer a pretty wicked all ETF income portfolio that is available via UMA at most indpendent b/d’s and major custodians. It’s basically a quant driven all market income portfolio with a little 30% tactical rate arbitrage built in. Most of you know how to find me if you want more info - I’ll try to keep the plugs at a minimum for a while.
Self Promotion Now Finished
There is really no great buy and hold income “strategy” or “portfolio”. The breakdown of high quality / low quality is of little importance when it comes to total return. Optimization of past allocations will almost surely produce less than desirable results - so you either need to go with a basic portfolio or something a little radical.
If all else fails, then just use Pimco Total Return at the core and complement it with various global/high yield/inv grade/etc. It won’t kick ass (as you say); but it won’t likely blow up either. Something a lot of over-optimized allocations/models will.
As fair warning - yield is irrelevant. Looks good on a statement, but total return and predictability of that return is what you should shoot for on an income portfolio that is non-fixed. If all you want is fixed, then just stick to the basics and do NOT try to maximize yield.
Good luck and if you find something great in your search, be sure to share it with the rest of us.