Hotel model portfolio - balanced income, medium risk

Who is it for: 
  • Investors looking for a good income from their capital, with the potential for some growth in their income and capital.
  • However, investors must be able to afford for their income to fall and to lose some of their capital under a worst case scenario.
  • May be suitable for retired investors looking for a balance between income and capital growth.
  • May also appeal to investors approaching retirement who can opt to reinvest their dividends until required.
What it looks like: 
Fund Role in portfolio
Artemis Global Income Invests in strong companies globally for income, has low UK content. View Factsheet
Baillie Gifford Corporate Bond Invests in different types of corporate bonds to generate a high monthly income. View Factsheet
City of London Invests mainly in well-known blue chip UK-listed companies and has been increasing its annual income for nearly 50 years. View Factsheet
Man GLG UK Income Adds more potential exposure to income shares. View Factsheet
Sarasin Global Higher Dividend Despite manager changes it has maintained a good track record. View Factsheet
Kames Diversified Monthly Income Fund increases the portfolio's exposure to property and other income-yielding assets View Factsheet
Threadneedle UK Equity Income A stalwart UK equity income fund. View Factsheet
Why were these funds selected: 

In order to provide investors with a regular basic monthly income as well as some capital security, this portfolio has a fixed income and a multi asset holding – Baillie Gifford Corporate Bond and Kames Diversified Monthly Income. The later fund has lower ongoing charges than the Premier Multi Asset fund it replaces.

As its core equity holdings, the portfolio holds three middle-of-the-road UK income stalwarts. There is City of London, an investment trust with a history of increasing its annual dividends for nearly 50 years, plus Man GLG UK Income and Threadneedle UK Equity Income, both steady past performers. To give investors exposure to overseas markets, there are also two global equity income funds with good track records – Artemis Global Income and Sarasin Global Higher Dividend.

Click here to view the live Hotel portfolio factsheet

Where to get it: 

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Timeline: 

2018

  • Sell Premier Multi Asset Monthly Income

    Has served portfolio well but has underperformed slightly.

  • Buy Kames Diversified Monthly Income

    A better multi-asset vehicle with lower ongoing charges.

2018

  • Sell Newton Global Income

    Disappointed over past year. Its thematic approach isn't working.

  • Buy Sarasin Global High Dividend

    Also takes a thematic approach. Delivered good track record and decent income.

2018

  • Sell Invesco Perpetual Income

    Fallen badly since Mark Barnett replaced Neil Woodford.

  • Buy Man GLG UK Income

    Has performed well since Henry Dixon took it over in October 2013

2016

  • Sell Fidelity Strategic Bond

    Potentially rising interest rates make bonds less attractive.

  • Buy Premier Multi Asset Monthly Income

    More scope for growing income across a range of asset classes.

2015

  • Sell Fidelity Moneybuilder Income

    Falling yields making this area less attractive.

  • Buy Fidelity Strategic Bond

    Provides greater flexibility to invest in different types of bonds.

  • Sell Sell M&G Optimal Income

    Falling yield has made fund less attractive for income seekers

  • Buy Baillie Gifford Corporate Bond

    High yielding, strategic, go-anywhere fund with greater scope to adjust to changing circumstances.

  • Sell Liontrust Income

    Change of objective from UK to global income and disappointing returns.

  • Buy Newton Global Income

    Provides international diversification and benefits from solid past performance record.

2014

  • Sell Schroder Global Equity Income

    Change of manager

  • Buy Artemis Global Income

    Good international diversification with low exposure to the UK.

2013

  • Sell Trojan Income

    Soft closed to new investors.

  • Buy Liontrust Income

    Appears well suited to benefit from rising equity markets.

  • Sell M&G Corporate Bond

    With outlook for equities improving, this fund sold to reduce bond exposure.

  • Buy Threadneedle UK Equity Income

    Provides better income growth potential than bonds, and prospect of capital gains.

  • Sell Murray International

    Premium to net asset value too high making it unattractive to new investors.

  • Buy Schroder Global Equity Income

    Invests internationally in solid companies with stable business models.

2012

  • Buy Fidelity Moneybuilder Income

    Provides exposure to high-quality investment-grade bonds for security of income and capital.

  • Buy Invesco Perpetual Income

    Solid UK equity income performer

  • Buy M&G Corporate Bond

    Provides exposure to high-quality investment-grade bonds for security of income and capital.

  • Buy M&G Optimal Income

    Strategic, go-anywhere bond fund.

  • Buy Murray International

    Provides global diversification with significant exposure to Asian and emerging market equities.

  • Buy Temple Bar

    Invests mainly in large blue chip companies and has long record of growing its income.

  • Buy Trojan Income

    Aims to provide steady growth and income by investing in reliable companies.

Last updated: 
17 January 2018