In the following sponsored Topic Deep Dive, Cyrill Moser, Head Provider Management at Zwei Wealth, and Jacques Drenkelforth from DCP Client Partner explore innovative income strategies and discuss approaches to generating predictable income while preserving capital.
We start by looking at the loss of purchasing power due to inflation over the long-term, even in Switzerland’s low inflation environment. This has implications for instance for investors making a decision about their pension payout plans as a potential rent could be fixed while costs are not.
Clients planning on keeping the capital in the pension fund and drawing a rent have their capital tied up with limited transferability. On the other hand, people deciding on self-managing the capital have much more flexibility but also significant responsibility. Both paths – or even a combination of them – can lead to the right outcome depending on various factors.
“Income” can be generated in various ways. The most common types are coupon payments from bonds and dividends from equities. DCP Client Partner also uses both of these approaches but combines them with additional features to increase the income possibilities. On the one hand, a focus on hybrid bonds enhances the coupon income and on the other hand, covered calls are used intelligently to enhance the equity income stream. Both approaches are explained in the series.
Three factors are outlined as key determinants for retirement: Predictability, Stability and Substance.
About DCP Client Partner
DCP Client Partner is an independent asset manager founded in 2004. With their focus on income-oriented strategies, they have been managing assets successfully for private clients as well as corporate and institutional clients for over 20 years.
