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Income+

• What are the different types of Income+ portfolios?

  Income+ employs investment strategies that focus on generating income and returns from fixed income securities such as bonds. Syfe partners with PIMCO on two options for investors. 

  • Income+ Preserve is built for investors looking to generate a steady regular income while seeking to preserve capital.
  • Income+ Enhance is built for investors seeking to generate higher current income and long term capital appreciation.

  Income+ Preserve

  Income+ Preserve employs a strategy that focuses on investment grade quality bonds which typically involves investing in high-quality bonds such as US Treasuries and investment-grade corporate bonds. The goal is to provide a steady stream of income while minimising the risk of default.

  Income+ Enhance

  Income+ Enhance employs a strategy that focuses on credit to generate higher returns which typically involves investing in higher-yielding, lower-rated bonds such as high-yield corporate bonds and emerging market bonds. The goal is to generate higher returns, but at the cost of increased risk.

  Source: Syfe, PIMCO, fund factsheets. As of 30 Apr 2023. Statistics are based on the weighted fund allocation within each model portfolio.
  * Refer to the Definitions section to understand these terms.
  ** Monthly payout ranges are computed based on the weighted average of the annualised historical distribution amount or dividend/distribution yield of the constituent funds from the latest three months. The upper and lower bounds of the range are rounded up to the higher 0.5% and down to the lower 0.5% respectively. The dividend amount or dividend rate/yield of the constituent funds is not guaranteed. Past distributions are not necessarily indicative of future trends, which may be lower. A positive monthly payout or distribution yield does not imply a positive return. Learn more.

  Learn more about the two options here.

   

   

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• What are the advantages of Income+ portfolios?

  Income+ portfolios use PIMCO’s best-in-class active funds as building blocks. While we continue to advocate passive strategies built using ETFs for most of our growth oriented portfolios, we believe active funds are better suited to solve the core income needs of clients. 

  Active funds have the following advantages compared to ETFs when investing for income, making them our vehicle of choice for our Income+ portfolios.

   

  Active management

  Income+ uses PIMCO funds that are actively managed and are able to utilise a broad range of fixed income securities that seek to produce an attractive level of income while maintaining a relatively low risk profile.

  Most ETFs, on the other hand, are managed passively and are limited in their ability to cater to the specific income needs of investors as well as adapt to different market situations.

   

  Tax efficiency 

  Given dividends form the major chunk of returns for income investors, any tax implications on it may have a significant impact on the overall returns. The funds used in the Income+ portfolios are domiciled in Ireland making them more efficient with respect to dividend withholding taxes.

  Compared to US domiciled ETFs, using Irish-domiciled funds can help Singapore-based investors save as much as 30% of dividend withholding taxes. 

   

  SGD hedging

  Income+ portfolios invest into SGD-hedged share classes of the constituent funds to mitigate currency risks. This is especially important for investors looking for a stable, consistent monthly dividend profile. Unhedged USD denominated ETFs may result in volatile SGD dividend payouts and cause disruptions in the ongoing income needs of clients.

   

  For more details, please refer to the Income+ portfolios’ Investment Strategy.

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• Can I open an Income portfolio if I do not meet Customer Knowledge Assessment (CKA) criteria?

  There are certain more complex retail investment products that are classified as Specified Investment Products (SIPs). 

  • If you want to buy and sell SIPs listed on an exchange, you need to go through a Customer Account Review (CAR) before opening an account.  
  • If you want to buy and sell SIPs that are not listed on an exchange, you need to meet the Customer Knowledge Assessment (CKA) criteria. 
  • You are assessed to be eligible to transact in Unlisted SIPs when you fulfil any one of the three criteria based on your educational qualifications, working experience and/or investment experience. As such, it is important that you answer these questions accurately during the online application process.
  • You are only eligible for Income portfolios if you meet at least one of the following criteria:
    • Have the relevant educational qualifications 
    • Have a professional finance-related qualification
    • Have a minimum of 3 consecutive years of relevant working experience in the past 10 years
    • Have made at least 6 transactions in unlisted SIPs in the last 3 years. Transactions include buying unlisted SIPs or topping up your investment in an unlisted SIP
    • Have completed the free online learning modules from ABS-SAS e-learning portal on SIPs and passed the assessment at the end of it 
  • Please refer to MAS guidelines for better understanding of SIPs. 

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