Family Income Fund
As of today, the XIRR of the Family Income Fund stands at 6.5%. This represents about a 3-4% risk premium to the current risk-free rate through a balanced allocation of bonds, bond funds, REITs, ETFs and equities. The current yield of 5% brings predictable cash flow. Net cash income is currently projected to be $51,000 for 2025.
Nonetheless as with most income generating portfolios, NAV erosion is present and fluctuates between -0.5 to -1.5%. At this moment, we expect market values to experience more volatility due to major US trade policy changes and tariffs as an economic tool. To cushion this, the fund has been increasing its exposure to gold ETFs.
Since its inception in 2013, the fund has grown and stuck to its key objective of cash flow generation and will continue to do so.
Portfolio Outlook
As Trump takes office, governments and companies are finding their way to cope with a new equilibrium (if there will be one) in geopolitics and business. This is expected to be a structural shift, and we shall await for the fog to clear.
Despite this volatile climate, profit shall be made in the midst of uncertainty and mispricings. In this context, the allocation of assets has shifted towards cash in preparation to seize the opportunities for accumulating dividend paying assets. Current cash yields are also at or above inflation, providing a slight real return with minimal risk.
At the same time, dollar cost averaging strategies to the S&P 500 through indexed funds using pension and tax deferred accounts will continue. This should sustain long term growth of the portfolio.
The above barbell approach will create a stable floor of immediate income without sacrificing long-term equity returns. Hence, whether a recession occurs or not, leading to more rate cuts than expected or a longer rate pause, the portfolio should benefit.
Founder and Chief Investment Officer, Qanely Group