By investing through the new Managed Income Portfolio Service ‘MIPS’, direct ownership remains with you while the daily management and administration is handled by our expert team. The four investment programs available: Core Income, Income Plus, Inflation linked and Customised, will suit different investors for different reasons. We wrap up these options for this market first service
Our new service, MIPS, offers investors four portfolio options.
And if you wish, the decision making can stop there.
By investing through MIPS, direct ownership remains with you while the daily management and administration is handled by our expert team.
As the service is the first of its kind in Australia it can be difficult to grasp. By breaking the service down and explaining the four programs, investors can learn which portfolio option would best suit their overall strategy, lifestyle requirements or both.
If you are already a direct bond investor, MIPS can complement your existing investments whether they are in fixed income or other asset classes.
Given the volatile times in markets, if you are concerned about the diversity of your portfolio – it is worth noting that all MIPS accounts must include a minimum of five bonds.
For example, should your portfolio be heavily weighted to shares and even high yield bonds you may want to consider The Core Income Investment Program. This program would also suit investors with low risk appetite who require regular income flow and are looking to, above all, protect their capital.
The Core Income option has set parameters where 100% of the portfolio that is constructed by the MIPS team may be allocated to investment grade credit. The program ensures the portfolio remains diverse by restricting more than 25% of exposure to any one issuer (company, financial or bank) and requiring 85% of investments be in investment grade bonds.
More detail
If your investment strategy is more inclined to risk/reward rather than protection you may prefer the Income Plus Investment Program. With a larger allocation to sub investment grade and/or unrated bonds, this program seeks a higher return compared to the Core Income option. Up to 75% of the portfolio can be allocated to high yield investments. However, no more than 60% of the managed portfolio will be invested in FIIG originated bonds.
This portfolio allows the management team more flexibility across the capital structure and credit ratings scale. So they have the opportunity to seek higher returns and beneficial trade opportunities.
More detail
Or, perhaps you are more focussed on protecting your purchasing power. If so, the Inflation-Linked Income Investment Program may be more suitable for you. If inflation was to increase, shares and property will only provide a limited defence. The only direct hedge is inflation linked bonds. As the returns you earn move in line with the Consumer Price Index.
The Inflation-Linked option aims to provide regular income that is adjusted for inflation and a return of principal that is also adjusted for inflation to preserve purchasing power into the future. As per the parameters, up to 80% of the portfolio can be allocated to investment grade, low risk, fixed income products.
More detail
This new service also includes a customised option. The Customised Investment Program is a truly bespoke approach to portfolio construction and management. It allows you to set certain parameters in which the portfolio will be constructed. The option is available to those investing $5 million or more. Both individuals and organisations have access to this option. It may suit corporations, charities and non-for-profits that have large cash balances and would like to have a professionally managed bespoke fixed income investment program.
So, if you would like to invest $5 million plus in MIPS, this option will allow you to define certain criteria in which the portfolio management team will use to seek appropriate investments. For example, if ethical investments are a priority in your investment strategy then this option would suit you as you can choose this to overlay the portfolio.
More detail
Next steps
If you’d like to open a MIPS account or simply learn more about the service, follow the below.
- Visit the MIPS webpage
- Download the information pack (link as above)
- Review the Information Memorandum
- Choose your investment program
- We will establish your Funding and Custody Account
- Your portfolio is created and professionally managed
- You can access your portfolio information on the go, 24/7
As always, please do not hesitate to contact us on our general line 1800 01 01 81 or speak with your FIIG representative should you have any questions.