The WAY Income Plan
The WAY Income Plan has been established to provide an equity-based strategy for producing a long term, dynamic 'income' stream.
THE CONSTRUCTION OF THE WAY INCOME PLAN
Access to income and access to water are both essential to life. In spite of this, our water supplies are guaranteed by reservoirs with relatively limited capacities. This works because each holds enough water to ensure uninterrupted supply during dry periods and until the next 'top up' from intermittent but inevitable rainfall. The size of each reservoir is determined by the demand it has to satisfy and the likelihood of rainfall.
Just like our dependence on water, we all need regular supplies of money to sustain us through life. The WAY Income Plan is an investment strategy which employs a cash 'reservoir' from which regular drawings can be taken. This reservoir is topped up by irregular capital profits from an 'investment pool'.
The size of the reservoir, compared with the growth pool, is determined by the level of cash drawings (in effect 'income') required by the investor. This Income Reservoir is initially set at a level representing five years' worth of drawings.
The Growth Pool is invested in an actively managed equity-based investment portfolio. Subject to the outcome of a quarterly review, a portion of any future capital growth (profits) enjoyed within this portfolio will be regularly transferred to top-up the Income Reservoir.
A review is undertaken every quarter in January, April, July and October each year, at which the overall progress of each Plan is measured. If the overall value of the Plan exceeds, by a sufficient margin, the amount originally invested (or the last re-balance value, whichever is the higher) then the Plan is re-balanced at the enhanced level.
Profits from the Growth Pool are used to top-up the Income Reservoir. Drawing levels are increased to reflect the growth in the Plan.
Investors may specify drawing levels of between 3% and 7% per annum, payable either monthly or quarterly. These regular amounts can be paid directly into each investors' personal bank or building society account.
A lower level of drawings will potentially lead to better overall performance and a greater likelihood that quarterly reviews will trigger regular increases to the level of drawings. Taking higher drawings will tend to lead to more modest overall performance and the likelihood that reviews will less frequently lead to increases.
The Income Reservoir is invested in either the low risk Elite Income Plan Cash Trust; the WAY Global Cautious Portfolio Fund or the WAY MA Cautious Portfolio Fund.
The Elite Income Plan Cash Trust typically comprises interest-bearing (British Pound Sterling) deposits with at least five deposit-taking institutions. The fund price is linked to the value of such deposits and as such should not fall in value. Interest arising from assets within the fund is retained to boost the unit price. An accurate number of shares may be encashed each month to deliver fixed drawings to each planholder.
The WAY Global Cautious Portfolio Fund and the WAY MA Cautious Portfolio Fund (Cautious Growth) are conservatively managed funds which seeks total investment return; however they cannot be described as sharing the same risk profile as the Cash Fund. Investors should be aware of this. The funds are invested in an actively managed and well-diversified selection of equity, fixed interest, cash and other specialist asset classes.
The Growth Pool will normally be invested in one of the actively managed Global Red, Blue or MA Growth Portfolios. Investors wishing to vary their risk profile may choose to invest in several plans with each linked to different Portfolios.
The construction of the WAY Income Plan means that volatility, which includes irregular upward spikes of performance, can work very well in planholders' long-term income interests by prompting frequent re-balances.
The objective of the WAY Income Plan is to harness the long-term growth benefits of international equity investment to support an enduring and potentially increasing flow of regular drawings.
- Plan Documents
- Reasons To Choose the WAY Income Plan