Gordon Smith
Partner, Fund Research

What is it?

Killik & Co’s Alternative Income Service aims to provide an attractive dividend yield in addition to modest medium to long-term dividend and capital growth. It does this via a portfolio of funds focused on alternative investments outside of traditional equity and fixed income securities, and those exhibiting lower volatility than direct investment in the equity markets.

Why Killik & Co?

As an independently owned investment house, we are free to develop investment ideas and strategies without any conflict of interest, giving us access to the best funds in the marketplace.

Our in-house team of expert analysts carefully select the funds that provide access to a number of income-producing alternative investments and investment strategies, such as real estate, infrastructure, asset-backed securities, multi-strategy funds and speciality lending.

Who is it right for?

Killik & Co’s Alternative Income Service will be used by those seeking to diversify an equity income portfolio into other income-producing asset classes, aiming to lower the portfolio’s overall level of risk.

The Service

The primary aim of the Alternative Income Service is to provide an attractive dividend yield that is over that which is available from cash deposits, high quality bonds and the broad UK stock market. An additional objective of the strategy is to achieve modest long-term income and capital growth. The service will aim to achieve these objectives via a portfolio of funds focused on ‘alternative investments’ outside of equity and traditional fixed income securities. It aims to allocate to investment strategies exhibiting low correlation (the degree to which two assets move together) to equity income and traditional fixed income portfolios. An allocation to the service therefore aims to provide useful diversification benefits to portfolios. Underlying investment strategies will generally exhibit lower volatility (price fluctuation risk) when compared to global equity markets. Gaining exposure to these investments will likely be relevant to those clients seeking to diversify the sources of income within an existing portfolio and/or lowering the level of risk of an equity income portfolio in terms of the variability of overall returns.

Investment process

Our expert analysts curate investments and investment strategies that are likely to display low levels of correlation to equity and traditional fixed income market movements for this service. The service invests in a range of funds, incorporating some of the world’s leading asset managers, all of which are specially selected and monitored on a continuous basis by our dedicated Fund Research team.

Our screening and selection process goes beyond financial analysis, and includes interviews with the Fund Managers as well as ongoing contact with them, ensuring any change to the investment case can be quickly identified and underperformers replaced where necessary.

These carefully selected funds can include real estate, infrastructure, asset-backed securities, multi-strategy funds and speciality lending. The exact number of underlying investments will depend on various factors, including your individual circumstances, but a typical portfolio is likely to contain a range of ‘alternative investments’, each with differing performance drivers.

The Alternative Income Service is likely to include closed-ended funds (e.g. investment trusts) and Real Estate Investment Trusts (REITs), both used to gain exposure to less liquid assets, as well as more conventional open-ended funds (e.g. unit trusts).

Risks To Be Aware Of

As is the very nature of investing, the value of your investments will rise and fall over time. We devote our time to sourcing the very best investments to meet your objectives, however please do not assume that past performance will repeat itself and you must be comfortable in the knowledge that you may receive less than you originally invested. Some funds will hold securities that are not denominated in sterling, leading to fluctuations in the portfolio value due to exchange rate movements.

Closed-ended funds may borrow to invest, thus adding to their overall level of risk, and may trade at a discount to their net asset value for prolonged periods of time.

Find Out More

Contact us on +44 (0) 20 7337 0777 or send us an email at info@killik.com to find out more about our Alternative Income Service or alternatively fill out the form below to download the brochure.

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