Investment Choices for Cash Dividend Distribution (hereinafter referred to as the "Investment Choices (Cash Distribution)") are favoured by customers who aim for passive income regardless of investment market performance. Compared with the investment portfolios which are structured for capital appreciation, Investment Choices (Cash Distribution) offer a steady stream of passive income through investment in the instruments with relatively stable and regular interest returns.
Where do Investment Choices (Cash Distribution) invest in?
Investment Choices (Cash Distribution) are primarily invested in bonds and money market instruments. To provide higher returns, some may hold high-dividend equities or preferred stocks in their portfolio, and even extend holdings to non-traditional markets and other compatible asset classes, such as bond futures and index funds (ETFs). The investment is also distributed across different geographic regions, including the United States, Europe, OECD countries, China and emerging markets.
Key features of Investment Choices (Cash Distribution), Preservation and Appreciation
Broadly speaking, Investment Choices (Cash Distribution) are invested in a diversified mix of bonds from all over the world. While the goal is to seek stability in returns, some may strengthen the portfolio through investment in the instruments that help capture the promising areas of opportunities, like high dividend equities. As such, the strategic asset mix is generally regarded as an investment option offering relatively lower risk and steady returns.
When in times of market uncertainty, some asset classes of Investment Choices (Cash Distribution) are likely to meet the income expectations. It is because the investment portfolio can enjoy recurring income from bonds which helps balance risks amidst market volatility. Meanwhile, an improvement in economic conditions would lead to better growth opportunities from high dividend equities. Therefore, Investment Choices (Cash Distribution) are dynamic in capital preservation and appreciation.
It should be noted that Investment Choices (Cash Distribution) usually include a substantial portion of bonds, changes in interest rates may still affect their performance.
Why choose Investment Choices (Cash Distribution)?
Although Investment Choices (Cash Distribution) primarily consist of internationally diversified portfolio of bonds, they are not limited to the risk profile of “conservative” customers. Indeed, no matter what stage of life you are in, a certain percentage of investment with relatively low risk and stable return should be included in the portfolio, it helps develop a balanced investment scheme in the long term. Investment Choices (Cash Distribution) could be considered as one of the viable tools for asset allocations, as their main investment objective is to strive for a consistent income stream from interest payments.
As Financial markets change constantly, customers should act in a precautionary way. It is advisable to clearly understand their risk profile and product information before investing. They should also seek professional advice from financial consultants if it is necessary. For further information of the investment choices available, please visit