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Income Portfolios
How do InvestEngine’s income portfolios differ from cash savings accounts?

InvestEngine’s income portfolios offer the opportunity to earn a higher income than from cash savings.

Our portfolios also have the potential for some capital growth. But, unlike a savings account, their capital value isn’t guaranteed.

With an InvestEngine portfolio, you are invested in a range of exchange traded funds (ETFs). Mostly these ETFs are invested in government or other bonds, while some may be invested in shares. ETFs trade on the stock market and their prices can rise and fall.

Each month, we collect the income from the ETFs in your portfolio and pay it out to your bank account. The monthly amounts will vary, depending on when the ETFs make their income distributions.

InvestEngine income portfolios

What do InvestEngine’s income portfolios invest in?

InvestEngine portfolios invest in a range of exchange traded funds (ETFs). Most of the ETFs in our income portfolios invest in government or other bonds, while some are invested in shares.

The mix and weightings of the ETFs vary across portfolios, depending on the risk profile of the portfolio.

InvestEngine income portfolios

When will I receive the income from my InvestEngine income portfolio?

We pay out the income from your portfolio in the first 5 working days of each month. We send the payment direct to your nominated bank account, and it will typically reach your bank instantly. In some cases it may take up to 4 days to credit your account, depending on who you bank with.

We pay your income in a single monthly amount. Each monthly payment consists of the income from your portfolio that InvestEngine has collected in the previous calendar month. You may not receive a payment in your first month after investing because of the timing of the income distributions of the ETFs in your portfolio.

InvestEngine income portfolios

Will I receive the same amount of income each month?

No, the amount of monthly income will vary depending on the income distributions from the ETFs in your portfolio. Some of the ETFs in your portfolio will distribute monthly, others only quarterly or half yearly. In some months, the total income payment from your portfolio could be very low, in others it could be relatively high.

The monthly income payments you can expect from your portfolio are shown in your InvestEngine dashboard. The “Projections” screen for your portfolio shows expected payments for the next 12 months.

InvestEngine income portfolios

Will I need to pay tax on the income I receive from my portfolio?

InvestEngine doesn’t deduct tax from the income on your portfolio. If you are investing through an ISA, the income you receive is tax-free. If you are investing via our Personal Account or Business Account, you may then need to pay tax on this income, depending on your individual circumstances.

We provide you with a consolidated tax certificate (CTC) at the end of each tax year, showing the income your portfolio has earned in the tax year. This information can be used to help complete your tax return.

InvestEngine does not provide tax advice. If you are unsure about your tax position you should speak to your own tax adviser or HM Revenue & Customs.

InvestEngine income portfolios

Is the quoted income yield guaranteed?

No, the annual yields on our portfolios are estimated and variable. 

Each portfolio’s yield is calculated from the yields of the ETFs it is invested in, which are based on the income they paid in the past year. Those income payments can change.

ETF yields will also vary as ETF prices go up and down in the stock market. And if we change the ETFs your portfolio is invested in, that could also affect the portfolio’s yield.

InvestEngine income portfolios

How are the yields calculated on InvestEngine’s income portfolios?

The income yield of an InvestEngine income portfolio is the weighted average of the estimated yields of the ETFs in the portfolio. The ETFs’ estimated yields are calculated from the last 12 months’ income they have paid.

Our quoted portfolio yields are updated monthly, using the closing prices for the ETFs on the last working day of the previous calendar month. Yields are calculated by InvestEngine based on market data.

InvestEngine income portfolios

I want the InvestEngine portfolio with the highest income — why are you suggesting I invest in a lower-yielding portfolio?

We have three income portfolios: Cautious Income, yielding 1.4%; Higher Income, yielding 2.4%; and Enhanced Income, yielding 3.5% (all estimated and variable). The lower the portfolio yield, the lower the investment risk (and the higher the yield, the higher the risk).

The portfolio we suggest for you is based on your answers to our online questionnaire. The questionnaire assesses your attitude to investment risk.

We want you to have an income portfolio with a risk level that you are comfortable with. The portfolio we suggest is the one we think is most suitable for you. But if you don’t like our suggestion, it is possible to opt for one of the others.

You can do this via the “This is the portfolio we suggest for you” screen in our application process. Simply move the risk slider from “optimal” to change the risk level of the portfolio, which also changes the income yield.

You can also change your portfolio at any time through your InvestEngine dashboard

Learn more about InvestEngine income portfolios

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