A Better Way to Measure Success in Equity Income
In recent years, equity income strategies
have seen increased interest from a broad range of investors. The goals of equity income strategies
are relatively simple: provide high levels of income over the long term while growing the underlying value of the portfolio. Most investors rely on a traditional set of metrics when evaluating an equity income strategy, e.g. total return or dividend yield. However, a reliance on these popular metrics to measure success can mask how capital and income accumulate over time, and the interplay between levels of capital and absolute levels of income.