We have two tranches of our portfolio, the growth and income tranche and the income tranche. Together the two generate around a 4.5% dividend yield on the portfolio. We would like to focus on the income tranche of the portfolio in this update. We currently have about 33% in the growth and income tranche and about 34% in the income tranche, with 10% in cash, and the remainder in hedges or inverse ETFs.

The income tranche is designed to get attractive dividend yields, but also some appreciation by being opportunistic. The growth, or inflation protection, in the portfolio comes from the growth and income tranche. In the income tranche there are six main sectors we focus on to get yield: electric utilities, equity REITs, mortgage REITs, business development companies (BDCs), master limited partnerships, and global telecom companies. We would consider fixed income securities, such as closed end funds, or ETFs, if there was an unusual situation to take advantage, but on a secular basis we are very negative on the bond market.

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PVG – Equity Income Monthly Update (May 2014)