FTC Income Strategy

Generate income.
Improve quality of life.

Being able to live comfortably off your own assets, even without making large withdrawals. A regular income is a legitimate goal for your wealth management. We have developed our own strategy to achieve this.

The Goal:
Generate Sustainable Passive Income

Income-oriented portfolios make sense for a variety of reasons: The regular income they generate can bridge the gap between pension payments and one’s former earned income, or simply serve as supplemental income to raise one’s standard of living.

Our income strategy offers the opportunity to generate regular and, ideally, steady returns without eroding the principal.

Why does this require a separate strategy? Couldn't you just withdraw the earnings from a regular stock fund on a regular basis?

In principle, that would be possible. However, it would not allow for either regular or consistent withdrawals, since stock markets can easily post negative returns for several years in a row. Therefore, one would have to accept significant losses in net worth if money were withdrawn even during periods of loss.

Challenge:
Bonds are not enough

For a long time, government bonds were the go-to option for generating a safe and steady income. However, they are increasingly losing their role as a reliable source of income: Real interest rates are negative in many countries—interest coupons cannot offset inflation. At the same time, government debt continues to rise, raising doubts about the sustainability of debt servicing. As the threat of fiscal dominance grows, so does the risk that central banks will have to keep interest rates artificially low to prop up national budgets—at the expense of investors. In other words, your potential income.

How to Benefit from the Income Strategy

The FTC Income Strategy includes several different asset classes, ranging from government bonds to money market products, which are designed to provide regular payouts. This broad diversification is intended to offset temporary periods of weakness in any given asset class.

All asset classes included in the strategy:

  • Investment-grade bonds provide a secure foundation
    • Bonds issued by governments or companies with high credit ratings
    • Very high security, relatively low returns
    • Example: Federal bonds, corporate bonds issued by Apple, Nestlé, etc.
  • High-Yield Bonds - Corporate bonds with lower credit ratings (non-investment grade) offer higher yields
    • Higher Returns with Higher Risk
    • Primarily in USD and EUR
  • EM Government Bonds in Local Currency—Good Yields with Continued High Security
    • Higher returns with higher risk
    • Government bonds from emerging markets (e.g., Mexico, Indonesia) denominated in their own currencies
    • Higher returns, but also exchange rate risks
  • Senior / Leveraged Loans via specialized funds – loans to companies with a variable interest rate (floating rate)
    • Priority Repayment in the Event of Insolvency (“Senior”)
    • Often awarded to private-equity-backed companies
  • Private Credit – loans issued directly (not publicly traded) through specialized funds or BDCs
    • Loans to Individuals
    • Particularly attractive when interest rates are rising
  • Global High-Dividend Stocks as an Additional Safety Net
    • Stocks of global companies with above-average dividend yields
    • Examples: Johnson & Johnson, Nestlé, Unilever, telecommunications companies, utilities
  • REITs (Real Estate Investment Trusts—real estate companies with a legally mandated high dividend payout ratio)
    • Equity REITs: Ownership and Leasing of Real Estate
    • Mortgage REITs: Investments in Mortgages and Loan Securitizations
  • Listed infrastructure generates stable cash flows through regulated or long-term contracts
    • Shares of publicly traded infrastructure companies
    • (e.g., toll roads, pipelines, power grids)
  • Cash / Money Market Products – Generate Secure Interest
    • Daily Allowance, Time Deposit
    • short-term bonds, such as short-term U.S. Treasury bonds

For anyone who wants a steady income

The FTC Income Strategy is designed to provide you with passive income and is intended for:

  • People who want to close their pension gap after retiring from the workforce.
  • Private individuals who wish to live off their assets.
  • Foundations that wish to generate a steady stream of income to ensure their long-term viability.
  • Bond investors who want to generate additional income in addition to their coupons.

Invest now and secure a steady income

The FTC Income Strategy

You will receive an actively managed portfolio whose sole objective is to generate regular payouts amounting to 4–5% of the invested capital.