What is a multi-asset income generation strategy?
Income investing is all about investing in asset classes that seek to deliver a regular flow of yield. The goal of a multi-asset income strategy is to provide investors with a steady – and potentially rising - flow of income by investing across yield-generating assets such as bonds, dividend-paying equities and real estate.
Investors can generally opt to use their income in two different ways. They can either receive pay-outs or alternatively reinvest their income in their portfolio.
The primary upside of reinvesting investment income is that it can be used to buy more shares or units - which could potentially appreciate and therefore boost your overall investment return. This tactic of compounding your income and returns can be a powerful tool, because as your investments grow, the returns delivered could rise as your portfolio’s value increases.
As with any investment strategy, risk is involved. Income streams can vary and investors may not get back what they invest. They can also be exposed to other risks, such as credit, counterparty and geopolitical risks. As such, multi-asset capital income strategies are best suited to those with a long-term time horizon.
Who can potentially benefit from multi-asset income generation strategies?
This approach can suit savers who are looking for a potential source of supplementary income, such as pensioners. The strategy may also suit savers who already have a healthy level of savings, which they do not need to draw upon in the short or medium term and can convert these savings into regular income. Equally, those looking to grow their portfolio can benefit from an income generation strategy, provided they reinvest, as outlined above.
AXA IM’s approach to multi-asset income generation
At AXA IM, we seek to offer a comprehensive approach, which allows us to take advantage of multiple income investment opportunities on behalf of our clients. We are committed to helping you make the best investments for income generation with robust solutions, risk monitoring and flexible asset allocation.
Delivering long-term value
Our Multi-Asset team applies three filters to identifying potential investment opportunities.
- World Filter: We analyse approximately 150 proprietary signals to identify the primary influences at play, at any given time across global markets. These signals look at key market drivers including the macroeconomic environment, technical factors as well as valuations and overall investor sentiment.
- Conviction Filter: This is how we find the best potential investment opportunities. We identify the broadest and most effective universe of investment ideas across asset classes to build outcome-focused portfolios.
- Risk Filter: Managing risk is in our DNA. In an effort to deliver long-term value, we apply a multi-tiered risk filter - diversified and flexible alocation, ESG criteria and market exposure checks - to maintain the sustainability of our strategies.
Multi-Asset Investments views – April 2020 – COVID 19 crisis: we have reduced our exposure to risky assets as short-term risk are high
Reduction of equity positioning in the short term - Virus related slow-down in Q2 and Q3 of 2020 is pushing the global economy into recession. Earnings should fall heavily
Multi-Asset Investments views – February 2020 – The market is climbing a wall of worry
We continue to overweight equities as positive developments (Central banks easing, Phase 1 Trade Deal signature, Brexit ) release some pressure and should allow global growth to navigate a soft landi ...
Trade wars, Brexit and slowing global growth: Will volatility return to markets in 2020?
The past year has been a complex period, dominated by numerous challenges including the ongoing US/China trade war, protracted Brexit negotiations and slowing global growth.