The importance of income diversity
Just as a diversified investment portfolio can reduce your risk of capital losses by spreading it across different asset categories, diversifying the sources of your income (income diversity)can reduce the chance that any one event or downturn in any one sector can severely impact upon your lifestyle and financial position.Having a range of active and passive income sources minimises the reliance on any one employer, client or investment. Here, active income refers to income received from performing a service and includes wages, commissions and income from businesses in which you materially participate. Examples of passive income include rent generated by an investment property, or dividends received, or interest earned.Because earning active income requires a consistent application of time and energy, finding reliable sources of passive income becomes increasingly important as we age and transition towards retirement.Long-term investments such as rental properties can be a good way of generating consistent passive income streams. However, when it comes to finding passive income sources that are also liquid, today’s low-yield environment is making things increasingly difficult for investors.
The Trilogy Enhanced Income Fund
If you’re looking for a way to generate competitive investment income that can be accessed at relatively short notice, then consider investing in a diversified income fund.
The Trilogy Enhanced Income Fund, for example, is designed to provide you with an income-focused investment, portfolio diversity and access to your money in 30 days.This fund invests directly and indirectly in a portfolio of cash, cash-style investments and other financial assets such as a range of short to medium term bank deposits, bills of exchange, promissory notes, bonds, fixed or floating rate debt securities as well as income securities.To enhance returns, part of the portfolio is invested in another registered managed investment scheme operated by Trilogy, the Trilogy Monthly Income Trust, a pooled mortgage trust that invests in loans secured by registered first mortgages over Australian property.The Trilogy Enhanced Income Fund paid investors a net distribution rate of 3.35%p.a. for the month ended 31 January 2021, and has achieved a historical average net rate of 3.83%p.a. since its launch in 2017.*
Learn more about investing in the Trilogy Enhanced Income Fund >