A DV E RT I S I N G F E AT U R E
Is your income suffering
from record-low interest rates?
Wealth management specialist Wilf Burns explores your options.
I
ncome is important. It’s an obvious
statement. The difficulty is that, in an
uncertain world, investment income is
hard to find right now. Investors looking for
income have faced an increasing challenge
ever since the financial crisis broke in 2008.
Prudence and vigilance became the order
of the day as financial institutions across the
globe took extreme measures to protect
themselves from global meltdown.
Central Governments across the world also
reacted strongly, forcing interest rates to
record lows. Six years on and interest rates
in the UK remain almost non-existent. The
result is real losses for savers in bank and
building society deposits which fail to
match inflation.
With dividend payouts on the turn, the
outlook for equity income funds could also
be on the up. Equity income funds have a
strong track record for delivering attractive,
sustainable income and steady returns over
the long term. But it is worth remembering
that not all equity income funds are the
same. Some are better for income, while
others provide better prospects for total
return investors through the reinvestment
of income. St. James’s Place offers a range of
equity income funds managed by investment
managers with complementary styles.
Investors wanting to secure a better
level of income have realised that
they must look beyond traditional
cash deposits. Corporate bond funds which are, by their
nature income producers, remain popular
particularly with cautious investors. At
St. James’s Place we firmly subscribe to the
view that a diversified fixed interest strategy
with exposure to investment grade, sub-
investment grade and senior secured debt
will help position your portfolio to benefit
from growth across the credit spectrum.
History shows that investing in equities, or
shares, has provided investors with a better
chance of outpacing inflation over the long
term versus other asset classes, particularly
if the shares are able to increase the dividend
payments year after year. Positively, there are
indications that the recent trend of increasing
dividend payments could be sustainable. Commercial property felt the full effects of
the credit crunch and the fall in property
values left many investors nursing significant
losses. But again, history suggests that
commercial property has a place in a portfolio
for income investors. Its long-term track
record is strong and, importantly, it offers
returns that are lowly correlated to other
WILF BURNS Associate Partner
Tel: 0151 958 0496
Email: [email protected]
Web: www.wilfburns.co.uk
Wilf
based locally
locally and
and is is
Wilf Burns
Burns is is based
inviting Wirral
Wirral Life
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asset classes. Investors should however note
that investing in real asset classes (equities,
corporate bonds and commercial property)
does not provide the security of capital
which is characteristic of a deposit account
with a bank or building society. The value of
capital, and income from it, can fall as well
as rise and you may not get back the original
amount invested.
Those investing for income need to remember
that no one asset class is the panacea. With
uncertainty around interest rates, a well-
diversified, well-managed portfolio which
blends a range of asset classes remains the
most suitable strategy for investors to satisfy
their longer-term income needs.
At St. James’s Place we believe that
our ability to tailor solutions to an
individual’s needs and attitude to risk
means your income investments are in
good hands.
The value of an investment with St. James’s Place will
be directly linked to the performance of the funds you
select and the value can therefore go down as well as
up. You may get back less than you invested.
The Partner represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management
products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The title ‘Partner’ is the marketing term used to describe St. James’s Place representatives.
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