Shifting Focus to High-Yield Private Credit and Strategic Divestments – May 2024 Update (Corrected Figures)
In my ongoing pursuit of maximizing dividend income and streamlining my financial portfolio, I’ve implemented significant changes this month, pivoting towards a more concentrated strategy focused on private credit investments. This shift is driven by the attractive monthly dividend yields offered by these instruments, which aligns perfectly with my goal of generating consistent cash flow.
Strategic Portfolio Adjustments:
- Entry into KKR Credit Income Fund (KKC):
- A key addition to my portfolio is KKC, a listed private credit company with a global investment mandate.
- The appeal lies in its diversified exposure to private credit markets and its consistent monthly dividend distributions.
- I added 4774 shares of KKC, at a cost of $10,976, resulting in a market value of $11,219, and a 2.21% gain.
- KKC has a yield of 8.52%
Continued Investment in Existing Holdings:
- I have maintained my position in PL8, recognizing its contribution to my overall dividend income. However, I have decided to refrain from further additions to this holding.
- Cromwell Property (CROMWELL PROPERTY) saw a further increase of 2409 shares, bringing the total to 6409 shares. The cost was $3021, and the current market value is $2,852, resulting in a -5.6% loss. The yield is 8.31%.
- Gryphon Capital Income Trust (GCI) was also increased by 401 shares, adding to the existing position, bringing the total to 587 shares. The cost was $11,973, and the market value is $11,873, resulting in a -0.83% loss. The yield is 8.27%.
- Metrics Income Opportunities Trust (MOT) offered a unit purchase plan, and I capitalized on this opportunity by investing an additional $30,000. This decision, despite my previously mentioned concerns, reflects a strategic move to leverage the potential short term gains of the companies marketing push, while monitoring the companies actions closely. I now hold 26701 units of MOT, at a cost of $86,939, and a current market value of $88,505, for a 1.7% gain. The yield is 6.51%.
- Metrics Master Income Trust (MXT) also saw an increase of 1438 shares, bringing the total to 6774 shares. The cost was $13,989, and the market value is $13,819, for a -1.22% loss. The yield is 8.61%.
- Qualitas Real Estate Income Fund (QRI) was increased by 621 shares, bringing the total to 2887 shares. The cost was $46,908, and the market value is $46,595, for a 0.33% loss. The yield is 8.2%.
- Divestment of South32:
- The sale of South32 at breakeven was a strategic decision driven by two primary factors:
- The company’s significant dividend cut, which contradicted my focus on consistent income generation.
- My overarching strategy of concentrating on private credit investments, which South32 did not align with.
- This sale shows a clear focus on the new direction of the portfolio.
- The sale of South32 at breakeven was a strategic decision driven by two primary factors:
| Company | Quantity | Cost | Market Value | Gain/Loss % | Yield |
|---|---|---|---|---|---|
| CROMWELL PROPERTY | 6409 | 3,021 | 2,852 | -5.6% | 8.31% |
| GCI | 5878 | 11,973 | 11,873 | -0.83% | 8.27% |
| KKC | 4774 | 10,976 | 11,219 | 2.21% | 8.52% |
| METRICS INCOME | 26701 | 86,939 | 88,505 | 1.7% | 6.51% |
| MXT | 6774 | 13,989 | 13819 | -1.22% | 8.61% |
| PLATO | 54192 | 59990 | 65030 | 8.4% | 5.45% |
| QRI | 28879 | 46908 | 46595 | 0.33% | 8.2% |
| 233,796 | 239,893 | 2.74% |
Portfolio Performance and Dividend Income:
- The current portfolio value stands at $239,893, representing a 2.74% gain on the initial cost of $233,796.
- Dividend income for May 2024 totaled $1,546.1, with contributions from GCI ($78.64), KKC ($79.72), MOT ($571.00), MXT ($72.25), PL8 ($425.80), and QRI ($318.69).
- Year-to-date dividend income has reached $4,865, demonstrating the effectiveness of my income-focused strategy.
- The total portfolio income has been increased by $50,000 in one month.
Financial Restructuring and Future Outlook:
- To further enhance my financial position, I am implementing a comprehensive strategy that includes:
- Drastically reducing expenses to maximize savings.
- Selling off accumulated possessions to generate additional capital.
- Anticipating a substantial influx of funds from the upcoming sale of a jointly owned real estate property.
- The sale of the Real estate will give a large injection of capital that will be used to further increase the income producing part of the portfolio.
- The selling of “stuff” shows a decluttering of life, and a focus on financial freedom.
Analysis and Rationale:
The shift towards private credit investments reflects a strategic move to capitalize on the attractive yields and monthly income streams offered by these instruments. The decision to divest South32 underscores my commitment to aligning my portfolio with my core investment objectives.
The increased investment into MOT, while contradictory to my prior statements, shows that an investor must be able to change there mind as new information becomes available. And that short term gains can be made, while still keeping a close eye on the companies performance.
The financial restructuring efforts, including expense reduction and asset liquidation, demonstrate a proactive approach to maximizing financial flexibility and accelerating wealth accumulation.
Looking Ahead:
I remain optimistic about the long-term prospects of my income-focused portfolio. The strategic adjustments implemented this month are designed to enhance income generation and streamline my financial position. I will continue to monitor market conditions and make adjustments as necessary to achieve my financial goals.
Happy investing!