Income delivers again

For the fifth year in a row, the Quilter Investors Monthly Income Portfolios have delivered a level of income higher than forecast.

In their last financial year, running from 1 May 2024 to 30 April 2025, the Quilter Investors Monthly Income Portfolio delivered an income of 4.14p per share and the Quilter Investors Monthly Income and Growth Portfolio delivered an income of 4.29p per share¹. Helen Bradshaw, Portfolio Manager, discusses how this level of income was achieved, the challenges that were overcome, and the forecast for the next financial year.

Cautious approach pays dividends

The income we delivered was supported by several areas that saw strong growth in the last financial year. Globally, equity dividends have continued to increase and some large companies, such as Alphabet (Google), made their first dividend payments. Europe was strong, with all our holdings delivering double-digit dividend growth. This was driven by the banking sector, which has benefited from the highest interest rates in well over a decade, albeit they have been reduced again now. We had expected some growth, but our estimates were more conservative than what was delivered.

Since the launch of the portfolios, we have always been cautious in our forecasts. For example, we never assume that special dividends of previous years will be repeated. We also factor in a number of ‘what if’ scenarios to ensure that we can meet the expectations of investors.

Japan blossoms

Elsewhere, we have also seen good dividend growth from our Japanese manager. Despite the year before being incredibly positive, we remained optimistic as we are now starting to see improved corporate governance driving better return of capital to shareholders. Meanwhile, the UK was a laggard, which aligned with our forecasts.

Looking ahead

If we look forward to the portfolios’ next financial year, 1 May 2024 to 30 April 2025, our income forecasts are 3.5p to 3.9p per share for the Monthly Income Portfolio and 3.6p to 4.0p pence per share for the Monthly Income and Growth Portfolio. This equates to projected yields as at 1 May 2025 of 3.8-4.2% and 3.5-3.9%, respectively.

For the Monthly Income Portfolio, we have been able to nudge the top of the forecast range higher than 2024-25 due to the modest growth in dividends expected from equity holdings. Fixed Income and equities are a similar weight in the Monthly Income Portfolio – around 40-45% each – so the lacklustre income growth expected from bonds is part of the reason we can only forecast a slight increase in the range.

Conversely, the Monthly Income and Growth Portfolio sees an increase of 0.2p per share to both the lower and upper bounds of the projected range. This is in line with the portfolio’s greater weighting in equities.

Expected drivers of growth

We expect our equity holdings to drive income growth over the coming financial year, particularly in Japan, with the UK and Europe also contributing. However, we expect emerging market equities to see their income distributions decline.

We do not foresee meaningful increases in distributions from our fixed income holdings. Central banks are in the mist of rate cutting cycles, which typically puts downward pressure on yields. Credit spreads are also tight so there is not much pickup on offer for taking on additional corporate default risk. This is driven by strong corporate fundamentals, so we do not foresee a significant spread widening event. However, were this to occur it would ultimately increase the income available from these bonds, although investors would experience capital losses in the meantime.

[1] Quilter Investors as at 30 June 2025. All income payments and forecasts are for the U1 (GBP) income shares.

Past performance is not a guide to future performance and may not be repeated. Future forecasts are not a reliable guide to future performance and may not be achieved. Investment involves risk. The value of investments may go down as well as up and investors may not get back the amount originally invested. 

Quilter Investors Monthly Income Portfolio and Quilter Investors Monthly Income and Growth Portfolio are sub-funds of Quilter Investors Multi-Asset OEIC, an investment company with variable capital incorporated in England and Wales. Quilter Investors Multi-Asset OEIC is authorised by the Financial Conduct Authority as a non-UCITS retail scheme and can be distributed to the public in the United Kingdom. Investors should read the KIID before investing in any sub-fund of Quilter Investors Multi-Asset OEIC. The KIIDs and the prospectus can be obtained from quilter.com in English.