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Trick or treating for yield

Trick or treating for yield

According to a recent Fortune article,  San Francisco was rated as the best city for trick-or-treating and the northern neighborhoods of Presidio Heights and Seacliff as the top ranked to visit on Halloween. Apparently kids from all over town visit these neighbourhoods in hope of a yield of full size chocolate bars from homeowners more generous than the rest.

These kids are no different than the portfolio managers of the eInvest Income Generator fund ASX: EIGA – they’re hunting for yield.

The eInvest Income Generator Fund is an active ETF, meaning there is a team of professional investors who actively select around 30 – 40 stocks in a portfolio with the aim to generate 7% p.a. in income. They focus on this target by specifically investing in the shares of companies that offer attractive dividends and franking credits – much like the kids selecting the generous neighbourhoods to increase their candy yield.

Passive investing or index investing is like showing up in every neighbourhood and receiving the average yield. As an investor, if yield is what you are after, wouldn’t you prefer to just target the generous neighbourhoods?

The proof is in the pudding. Since inception in May 2018, EIGA has delivered 7.2% more income than the ASX 300 benchmark. Nothing spooky about that.

 

This article is by Jodi Pettersen of eInvest and is not financial advice. Speak to your financial adviser or broker for more information. I’m sure they’ll be happy to help you. Don’t forget to always read the Product Disclosure Statement (PDS) for the active ETF you are invested in. To find out more and to find the PDS please visit einvest.com.au