While speculation continues regarding the US Federal Reserve’s potential rate cuts in 2024, market participants have tapered expectations and expect a smaller magnitude as compared to forecasts at the start of the year.
With US interest rates continuing to hover above 4 to 5%, how can investors leverage bonds and fixed income to enjoy high yields and create flexible monthly passive income in a “higher for longer” environment?
Singapore’s largest online wealth management platform, Endowus, has recently launched three IncomeUp Portfolios for Hong Kong investors. Tailored to suit individuals at different life stages and investment goals, these portfolios aim to generate higher returns for your capital.
Endowus IncomeUp: tailored passive income for different life stages
Individuals of different ages, backgrounds, and professions have varying needs for passive income. Some investors look to income-generating portfolios to stabilize their finances, while others may have monthly expenses to cover, including mortgage payments, rent, and children’s education, among others.
Endowus has tailored three income-generating portfolios specifically for you at different ages and life stages: “IncomeUp — Steady,” “IncomeUp — Plus,” and “IncomeUp — Growth.”
Three IncomeUp Portfolios include：
1. IncomeUp — Steady
IncomeUp — Steady is a conservative investment portfolio designed for those nearing or already in retirement, providing stable monthly dividends. The portfolio is 100% allocated to fixed income, focusing on investing in high-quality and diversified bond funds. It is suitable for individuals looking to establish a regular passive income source to cover daily expenses or supplement insufficient pensions or retirement funds.
Current target dividend yield: 5.0%–6.0% per annum*
2. IncomeUp — Plus
IncomeUp — Plus is a relatively more aggressive investment portfolio, investing in multiple categories of bonds, including high-yield bonds, with a higher monthly target dividend payout. The portfolio allocation strategy is 100% fixed income, suitable for working professionals or those with higher living costs who need correspondingly higher dividend levels to cover larger regular expenses, such as mortgage payments, rent, or children’s education.
Current target dividend yield: 6.5%–7.5% per annum*
3. IncomeUp — Growth
IncomeUp — Growth is a diversified multi-asset investment portfolio, investing in both equities and bonds, aiming for monthly dividends as well as long-term capital appreciation potential. The portfolio allocation strategy is 60% fixed income and 40% stocks, suitable for young working professionals who want and benefit from both passive income and capital growth.
The income portion of the portfolio can be used to cover regular expenses, while investment in globally diversified high-dividend equity funds aims to achieve the long-term goal of wealth accumulation. However, it’s important to note that while IncomeUp Growth has the potential for capital appreciation, it carries higher risks compared to IncomeUp — Steady and IncomeUp — Plus.
Current target dividend yield:：4%-5% per annum*
Comparing the three IncomeUp Portfolios
| IncomeUp — Steady | IncomeUp — Plus | IncomeUp — Growth | |
| Objective | A conservative portfolio focused on stability while aiming to preserve capital | A relatively aggressive portfolio focused on higher level of monthly payouts | A measured portfolio with dual objective of monthly payouts and long-term capital growth |
| Investment Orientation | conservative | Moderately aggresive | aggressive |
| Current target payout p.a. | 5.0% to 6.0% | 6.5% to 7.5% | 4.0% to 5.0% |
| Who is it for? | Retirees or those who want a regular passive income stream | Working adults or those who want a higher level of payouts to cover expenses | Younger adults or those who want and benefit from both passive income and capital growth |
| How to use it? | For regular income to meet expenses reliably and supplement annuity or pension payouts | To meet bigger regular expenses such as mortgage, rental or kids education | Benefit for some regular income to offset expenses today and focus on building wealth over the long term |
| Asset allocation | 100% Fixed income | 100% Fixed income | 60% Fixed income，40% Equity |
| Underlying funds | 30.0%
PIMCO GIS Income Fund 17.0% JP Morgan AM Income Fund 16.0% Neuberger Berman Strategic Income Fund 12.0% AllianceBernstein American Income Portfolio Fund 10.0% Neuberger Berman Short Duration Emerging Market Debt Fund 8.0% Fidelity Asian Bond Fund 7.0% Pinebridge Asia Pacific Investment Grade Bond Fund |
25.0%
PIMCO GIS Income Fund 20.0% Barings Global High Yield Bond Fund 15.0% Neuberger Berman Short Duration Emerging Market Debt Fund 10.0% AllianceBernstein American Income Portfolio Fund 10.0% Barings Global Senior Secured Bond Fund 10.0% JP Morgan AM Income Fund 10.0% Neuberger Berman Strategic Income Fund |
18.0%
PIMCO GIS Income Fund 10.0% AllianceBernstein Low Volatility Equity Portfolio Fund 10.0% Fidelity Asian Bond Fund 10.0% Invesco Global Equity Income Advantage Fund 10.0% JP Mogan AM Income Fund 10.0% Neuberger Berman Strategic Income Fund 8.0% Capital Group New Perspective Fund 7.0% AllianceBernstein American Income Portfolio Fund 6.0% Neuberger Berman Short Duration Emerging Market Debt Fund 6.0% Pinebridge US Large Cap Research Enhanced Fund 6.0% Schroders Global Emerging Markets Opportunitues Fund 4.0% Pinebridge Asia Pacific Investment Grade Bond Fund |
| Current asset allocation | Investment Grade Bonds：62%
High Yield Bonds：23% Treasuries：14% Cash：1% |
Investment Grade Bonds：44%
High Yield Bonds：46% Treasuries：10% Cash：1% |
Investment Grade Bonds：37%
High Yield Bonds：14% Globl Dividend Stocks：20% Treasuries：8% Globl Stocks：20% Cash：1% |
| Portfolio risk rating | 2 | 3 | 4 |
Endowus IncomeUp Portfolios features
Now that we have a basic understanding of the three IncomeUp Portfolios, let’s delve deeper into the features of them.
Discover how they assist various investors by offering flexible passive income investment solutions, effectively addressing different market conditions and personal wealth needs. With the guidance of a professional investment team, managing and establishing passive income becomes effortless.
Institutional investment solutions curated by experts from Investment Office
The Investment Office at Endowus is led by Samuel Rhee, with over 3 decades of experience and previously served as the CEO and CIO of Morgan Stanley Investment Management in Asia. The Endowus Investment Office team, with cumulative investment experience of over 100 years, offers services such as investment advisory, asset allocation, and portfolio management to individual and institutional clients.
The funds selected for the IncomeUp Portfolio are required to pass through Endowus’ proprietary “SMART+” Framework. From thousands of funds on the market, this process identifies the Best-In-Class funds managed by the world’s leading fund companies, including UBS, Barings, Fidelity, Invesco, J.P. Morgan Asset Management, Neuberger Berman, PIMCO, PineBridge, and Schroders, among others.
The portfolio also includes share classes of funds that were previously only available to large institutions, allowing investors to pursue better investment performance through diverse fund options.
Lower costs, save up to 50% on fund fees.
Unlike traditional banks and brokerage firms, Endowus not only eliminates subscription fees, redemption fees, switching fees, but also provides 100% Cashback on trailer commissions, typically hidden in fund management fees. It only charges a single all-inclusive advisory fee, as low as 0.10% to 0.60% per annum.
Compared to other investment platforms, investing in the same funds through Endowus can save up to 50% on fund-level fees, helping you enhance your investment returns. Moreover, a $0 sales commission means Endowus is free from any external influences, offering investors conflict-free, professional, and independent advice.
The minimum investment amount for Endowus IncomeUp is only $1,000 USD. All underlying funds are denominated in US dollars. Investors can easily make investments by transferring Hong Kong dollars directly and utilising Endowus platform’s automatic FX feature. The platform offers wholesale exchange rates provided by partner banks, without charging any additional exchange spread or fees, significantly saving on exchange handling fees typically paid at banks or through other channels.
More flexible than savings insurance, more diversified investments spreading risk.
The market offers various investment products for generating passive income, including high-dividend stocks/ETFs, and savings insurance, among other options. How should investors compare these different choices?
The advantage of Endowus’ IncomeUp Portfolios lies in its ability to provide competitive monthly dividends without a lock-up period. You can redeem your IncomeUp investment portfolio at any time, offering higher financial flexibility in changing investment environments or personal circumstances. Compared to some insurance products, such as life insurance, short-term savings policies typically have terms ranging from 3 to 5 years. Withdrawing funds early might incur additional penalties or even result in a loss of principal.
The sources of income for the Endowus IncomeUp Portfolios are highly diversified. As Endowus operates on a zero-commission-based business model, it does not favor any single fund management company when selecting funds. It aims to identify the Best-In-Class Funds in each asset class and ensures portfolio diversification to avoid excessive concentration of credit risk in any particular region or company.
In contrast, investing in one or a few high-dividend yield stocks carries the risk that dividends are not obligatory, and companies may suspend dividend payments. Additionally, investors face the risk of dilution if the company issues more shares for financing and they do not participate in the rights issue.
Singapore’s largest online wealth management platform arriving in Hong Kong
When choosing any investment platform, the company’s background and strength are also very important. Endowus is Singapore’s largest independent online wealth management platform, with assets under advice totaling over HK$46 billion (US$6 billion). Since its establishment in 2017, it has raised over HK$5 billion (US$95 million) in financing. Investors include UBS, Citi Ventures, MUFG, Singapore’s Economic Development Board Investment Company (EDBI), Lightspeed Venture Partners, Prosus Ventures, Samsung Ventures, SoftBank Asia (SBVA), Singtel Innov8 under Singtel, Z Venture Capital, along with some of Asia’s largest family offices, as well as Endowus’ founders and employees.
The Endowus operating team comes from top enterprises in the financial and tech industries, including Morgan Stanley, Goldman Sachs, UBS, Amazon, Grab, Alibaba, McKinsey, Fidelity, etc., and is familiar with industry operations.
Endowus is licensed by the Securities and Futures Commission (SFC) of Hong Kong and the Monetary Authority of Singapore. In Hong Kong, it holds SFC licenses for Type 1 (Securities Trading), Type 4 (Advising on Securities), and Type 9 (Asset Management); Central Number BQR225. According to SFC regulations, customer funds and assets must be kept separate from Endowus company assets. All client investments are held in custodial accounts maintained by transfer agents of various fund companies, while uninvested cash balances are kept in separate client money accounts at HSBC Hong Kong, regulated by the Hong Kong Monetary Authority.
Under the leadership of a professional operating team, Endowus has won numerous industry awards, including the Best of the Best Singapore’s Best Wealth Management Fintech Company by Asia Asset Management magazine in 2023, The Asset’s AAA Digital Awards for Singapore’s Best Management Platform User Experience, Best CEO of the Year, and Forbes Asia’s 2022 Top 100 Companies to Watch, affirming its performance.
One-on-one personalised investment advisory service
You can also book a free appointment with a licensed private wealth advisor from Endowus, who is regulated by the Securities and Futures Commission (SFC), to receive personalized financial advice and solutions tailored to you.
Know more about IncomeUp Portfolio:
https://endowus.com/en-hk/model-portfolios/passive-income-incomeup
Endowus account opening: easy online onboarding
Investors can open an account and start investing within minutes through a few simple steps on the Endowus app or website.
- Download the Endowus app or visit the Endowus website to register an account with your email, set up a password, and complete phone number verification.
- Fill in personal information and complete an investment risk assessment.
- Upload your ID card.
- Transfer HK$10,000 or more from a local bank account to activate your account, as required by the Hong Kong Securities and Futures Commission.
- Approval can be as fast as 1 business day, and you will be notified by email once your application is successful.
*Endowus HK Limited is licensed (CE No. BQR225) by the Securities and Futures Commission of Hong Kong (SFC) for Type 1 (Dealing in Securities), Type 4 (Advising on Securities) and Type 9 (Asset Management) regulated activities.
Your money and assets are kept separate from the Endowus company assets as required by the Securities and Futures Commission of Hong Kong。All investments made by users are held in custodial accounts maintained by transfer agents of various fund companies, while the cash balances not invested by clients are kept in separate client money accounts at HSBC Hong Kong, regulated by the Hong Kong Monetary Authority.
*This is an investment product. Investment involves risks. **Target Payout: The term “Target Payout” refers to the projected annual cash payout amount as a percentage of the investment portfolio’s net asset value. This estimation is based on a formula by the Endowus Investment Office, leveraging a comprehensive assessment of historical and anticipated payouts associated with the underlying funds。Past performance is not an indicator of future performance and does not guarantee future results. Expected performance is not assured. Please refer to the terms and conditions and disclaimer here https://hk.endw.us/legal-tc。
(Information provided by the client)
Investing involves risks, and prices can rise or fall.
Note: The above information and data are for reference only and do not constitute any offer, solicitation, invitation, inducement, representation, recommendation, or advice in relation to any investment. Past performance of assets does not represent future performance. Estimates, assumptions, and forecasts are for illustrative purposes only and may or may not be realized. Before making any investment, one should carefully evaluate the benefits and risks. This website shall not be responsible for any consequences arising from the use or inability to use the information or data provided on this website, nor shall it be liable for any losses or damages resulting from the above situations.
Risk Disclaimer: This content should not be regarded as an invitation, solicitation, invitation, or basis for any investment product or investment decision, nor should it be interpreted as professional advice. Investment in fund products involves risks. Before investing, please fully understand the characteristics and risks of fund products and seek professional advice when necessary.
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