Income Strategy
Sustainable Current Income
Our Income Strategy delivers sustainable cash flow with maximum flexibility to go anywhere and do anything within our ethical framework. From 4-5 direct positions to 1000+ holdings through funds, we focus on current income generation with capital preservation.
Target: Investors prioritizing current income and capital preservation with complete flexibility in approach
Strategy Overview
- Flexible Holdings - From 4-5 direct positions to 1000+ through funds
- Income Focus - Regular quarterly distributions
- Stability Priority - Capital preservation with income growth
- Lower Volatility - More conservative than growth-focused approaches
Portfolio Composition
Investment Strategy Allocation
- Closed-End Fund Strategies: 57.3% | Two specialized closed-end fund managers
- REIT Preferred Securities: 30.5% | High-yield real estate preferred exposure
- Tail Risk Hedging: 12.2% | Portfolio downside protection
Current Yield Profile
- Portfolio Weighted Yield: 8.1% | High income generation focus
- High Yield Holdings (5%+): 87.8% of portfolio
- Income Generating Assets: 87.8% of allocation
- Hedging/Protection Assets: 12.2% of allocation
Portfolio Characteristics
- Holdings: 4 specialized funds
- Position Range: 12.2% - 34.1%
- Concentrated Approach: High-conviction positions
- Income Focus: 8.1% weighted average yield
- Strategy Type: Fund-based implementation
- Risk Management: Tail risk hedge included
- Specialization: Closed-end fund expertise
- Yield Range: 0% (hedge) to 12.3% (income)
Ethical Implementation
Exclusion Impact
Our income strategy excludes approximately 1,800 dividend-paying companies that fail our ethical criteria - about 52% of traditional income investments including many high-yield sectors.
- Product-Based: Tobacco (high yields), fossil fuel utilities, weapons manufacturers
- Conduct-Based: Predatory lending, environmental violations, labor abuses
- Strategic Commitments: Israeli apartheid, petrochemicals, exploitative finance
Investment Process
Selection Criteria
- ✅ Ethical Screening - Must pass all exclusion criteria
- 💰 Dividend Quality - 10+ year payment history preferred
- 💪 Financial Stability - Conservative payout ratios (<70%)
- 🏢 Business Durability - Recession-resistant business models
- 🎯 Management - Committed to sustainable dividend policy
- 📈 Growth Potential - Ability to grow dividends over time
Performance Summary
Monthly Performance History
| Month/Year | Income Strategy | Benchmark | Excess Return |
|---|---|---|---|
| 2024 | |||
| January 2024 | -0.82% | -0.19% | -0.63% |
| February 2024 | -1.35% | -1.92% | +0.57% |
| March 2024 | +3.16% | +0.48% | +2.68% |
| April 2024 | -1.36% | -1.71% | +0.35% |
| May 2024 | +0.93% | +1.34% | -0.41% |
| June 2024 | -0.82% | +0.89% | -1.71% |
| July 2024 | +5.85% | +2.90% | +2.95% |
| August 2024 | +2.91% | +1.02% | +1.89% |
| September 2024 | +1.49% | +1.36% | +0.13% |
| October 2024 | -1.00% | -2.42% | +1.42% |
| November 2024 | -0.89% | +1.04% | -1.93% |
| December 2024 | -2.25% | -1.64% | -0.61% |
| 2025 | |||
| January 2025 | +0.03% | +0.57% | -0.54% |
| February 2025 | +0.42% | +2.13% | -1.71% |
| March 2025 | -1.39% | +0.05% | -1.44% |
| April 2025 | -0.80% | +0.38% | -1.18% |
| May 2025 | +0.87% | -0.69% | +1.56% |
| June 2025 | +2.12% | +1.53% | +0.59% |
| July 2025 | +4.06% | -0.24% | +4.30% |
| August 2025 | +0.30% | +1.15% | -0.85% |
Strategy TWR = Time-Weighted Return. Benchmark = Bloomberg Aggregate Bond Index
Performance Analysis
Risk Considerations
Income Philosophy
Sustainable Dividend Focus
We prioritize dividend quality and sustainability over maximum current yield:
- Payment History - 10+ year consistent dividend track record
- Payout Sustainability - Conservative ratios typically below 70%
- Business Durability - Models aligned with long-term trends
- Ethical Alignment - Management teams with stakeholder focus
Tax Efficiency Considerations
- Qualified Dividends - Majority of portfolio generates tax-advantaged income
- REIT Optimization - Balanced exposure considering tax implications
- Account Placement - Strategic positioning across taxable and tax-deferred accounts
Suitability Assessment
✅ Appropriate For:
- Investors seeking regular income from their investments
- Retirees or pre-retirees needing portfolio cash flow
- Conservative investors comfortable with dividend equity exposure
- Values-driven investors wanting sustainable income sources
❌ May Not Be Suitable For:
- Aggressive growth oriented investors
- Those in very high tax brackets (in taxable accounts)
- Investors with very short time horizons
- Those requiring maximum diversification across asset classes
Get Started
All investments involve risk of loss, including loss of principal. Past performance does not guarantee future results. ESG investing may limit investment opportunities and affect performance relative to strategies that do not use such criteria. This information is not intended as investment advice and should not be used as the sole basis for investment decisions.
Invest Vegan LLC DBA Ethical Capital is a Utah-registered investment adviser (CRD #316032). Registration does not imply a certain level of skill or training. All investing involves risk and potential loss of principal.