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Advisors are constantly faced with more and more challenges in the industry. As though this is not enough, there's the ongoing economic (specifically geo-political) factors which also adds to the frustration. At Amity Investment Solutions we aim to alleviate some of the everyday concerns such as fund selection or the question that so often arises in conversation: What is the ideal investment solution for clients withdrawing an income?

Sustaining an inflation adjusted income for as long as possible requires consistent returns above inflation. However, for the investment strategy to be truly successful, the long-term journey during the retirement years also requires that the client experiences financial wellbeing: balancing eating well with sleeping well! This necessitates an investment strategy that focuses on both the long-term return and the journey to achieving those returns.

Introducing the Income Model Portfolio Range

Amity Investment Solutions has designed a range of income model portfolios that can fulfill the income need of the client. The benefit is that the client doesn’t need to take on any additional risk, but the client can potentially earn better returns. Over time volatility won’t be the only enemy to fear. As inflation continues to rise, this becomes a bigger threat to investors. This could mean that other income-like instruments such as local bonds, local flexible income, preference shares, inflation linked bonds, and corporate debt, should be considered.

The income solution range was designed with the idea of seeking the highest probability of producing a sustainable income for investors. The level of income required, income growth required, the need for capital preservation, and the need for the capital to grow were all factors considered

Outcomes-based investing: We focus on consistency!

Our Balanced Income model portfolio has delivered excellent consistency. This model does not only focus on income generating assets, but also capital growth assets. This model managed to consistently achieve a return in excess of CPI+4% (it's upper target band) 60,8% of the time over a rolling 5-year period. The ASISA MA Medium Equity category only did so 41% of the time. (Time period used: 1 July 2002 to 28 February 2022). You can read the latest blog here

Excellent partners equals excellent results!

Since the start of 2019 Matrix Fund Managers managed a segregated portfolio for Amity. At the end of 2021, Amity decided to launch a CIS fund and outsource the management to Matrix. The mandate and all assets were transferred to this newly launched CIS fund named the Amity BCI Diversified Income Fund. This fund measures performance against a blend of 80% STeFI Composite and 20% JSE All Bond Index. The fund mostly consists of floating rate notes and highly liquid instruments. This fund's objective is not to lose capital over any rolling 12-month periods and to also enhance on the STeFI index over any rolling 12-month. This fund is ideal for client's with a short-term, essential goal. Read the latest blog on this fund here

Stable income offering some stability

As inflation becomes a bigger concern than market volatility, it could be crucial to not leave clients invested in pure money markets. When trying to enhance on these money market rates and still offer a blend of income funds with the main focus being income withdrawal, the Stable Income portfolio could be ideal.

This portfolio considers two key risk profiles:

  • The Income Risk

Income should be as stable as possible and given the type of fixed-income securities used, there may be a risk that issuers default on making the interest payments. The income generated from the underlying managers should be used to pay the income required by the client.

  • The Capital Risk

Given the type of fixed-income securities used, we understand that there may be a risk that issuers can default on paying back the capital. This also highlights that there may be small up and down movements in the capital value, but it can be expected that the capital should stay the same over the investment horizon. In both instances we considered these two risks and ensured that quality managers were used when designing this model portfolio. Read the blog post on this model here

Amity's process- what you need to know.

Amity Investment Solutions follows a robust investment process. As we are a top-down investment manager we consider the macro-economic conditions, and place large focus on asset class valuations. All this filters through to our stringent in-house research tools, and ultimately our quantitative scorecard where managers are analyzed. It is exactly this methodology that enabled us to select high quality investment managers in the flexible income and short-term interest-bearing space. These managers should adhere to our different criteria metrics.

When considering income model portfolios  that blends high quality income managers; offers a high level of capital stability, and ultimately produce a high level of income, Amity can assist. We aim to offer solutions for various type of client goals and needs such as clients withdrawing any level of income or clients with short-term, essential goals.


The Amity Advisor Experience team will assist with any queries you may have!

Go to our contact us page to find the necessary details.

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