Income+ portfolios use active ETFs and managed funds as their core building blocks. While Syfe continues to advocate passive ETF strategies for most growth-oriented portfolios, active management offers key advantages for income-focused investors, providing flexibility, tax efficiency, and currency stability.
Active management
Income+ Preserve and Income+ Enhance portfolios leverage PIMCO’s actively managed funds to invest across a wide range of fixed income securities. This allows them to capture attractive income opportunities while maintaining a relatively low risk profile. In comparison, most ETFs are passively managed, offering limited flexibility to adapt to changing market conditions or tailor holdings to investors’ income needs.
Income+ Max is built with actively managed ETFs from J.P. Morgan Asset Management and other leading ETF managers. Unlike passive ETFs, these select high-quality companies and bonds, and generate additional income by selling options on their equity and gold holdings. Across the three portfolios, this gives Income+ investors income from bond coupons, equity dividends and option premiums.
Tax efficiency
Since dividends constitute the major portion of returns for income investors, any tax implications can significantly impact overall returns. The funds used in Income+ Preserve and Enhance portfolios are Irish-domiciled, making them more efficient with respect to dividend withholding taxes. The majority of the ETFs in Income+ Max are also Irish-domiciled UCITS funds.
For Singapore-based investors, this structure can provide up to 30% savings compared to US-domiciled ETFs enhancing overall net returns from income distributions.
SGD hedging
Income+ Preserve and Income+ Enhance portfolios invest in SGD-hedged share classes to reduce foreign exchange volatility. This helps ensure stable, consistent monthly dividend payouts, which is essential for clients seeking predictable income. In contrast, unhedged USD-denominated ETFs may lead to fluctuating SGD payouts due to currency movements.
For more details, please refer to the Income+ portfolios' Investment Strategy.
