Rivkin ASX Income Strategy

Our fly-under-the-radar Income Strategy provides investors with a blend of cash flow, and - in case where yield is highly sought after - capital gains. 

The ultimate strategy for INCOME

You may never have to worry about income again

  • Our Income Strategy aims to provide investors with a blend of cash flow, and – in cases where yield is highly sought after – capital gains.
  • Unlike cash or term deposits, the instruments included in the Income Strategy are considered complex, given that they comprise ASX-listed debt, issued by companies that seek to borrow money from retail and wholesale investors.
  • The issuers of this debt can range considerably in terms of their quality and the instruments themselves differ greatly in terms of their characteristics, and this is where Rivkin’s analysis adds value.
  • By analysing the quality of these instruments Rivkin aims to structure a diversified strategy of high-income securities that can offer significant rates of return, as illustrated in the chart below.
  • Access our Income strategy through a membership to Rivkin Local, and also receive our EventBlue ChipMomentum and Value strategies.
"One of my favourite strategies to invest in is the Income Strategy. This strategy is perfect for my super fund as I feel very safe with the companies that are involved and the yields are outstanding. The strategy updates are easy to understand and simple enough for me to re-balance myself.“ 

Paul G., VIC

The Income Strategy vs. current cash rate

*Past performance is no guarantee of future performance. Brokerage and fees not taken into account.
"The Income Strategy invests in good, safe companies and the yields on offer are an attractive alternative to term deposit investments. The team at Rivkin make everything so easy. I look forward to continued positive returns."

Gillian D., NSW

Frequently-asked questions

  • Our Income Portfolio is made up of a maximum of 7 securities which we've invested in via Rivkin Local's live $300,000 model portfolio. The Income Portfolio does not include any fully-paid shares, rather mainly hybrid securities. A hybrid is a security that combines characteristics of both ordinary shares and debt. In the case of the hybrids we invest in, they trade on the ASX like ordinary shares but the payments that are made are actually interest payments rather than dividends from profits.
  • The Income Portfolio holdings usually consist of top 200 companies across multiple sectors. We typically avoid the offerings from the big four banks due to their relatively meager returns, but have invested in the regional banks such as Bendigo Bank for example. 
  • Despite trading on the ASX, the investments are not in fully paid ordinary shares but are listed debt, and have many of the same qualities as government bonds. So the investments pay interest rather than dividends, and one of the only risks in holding these long term is that the company issuing them remains solvent.
  • Hybrids trade exactly like ordinary shares; that is, they are tradeable on the ASX and there are buyers and sellers on either side.
  • Investors that wish to follow our Income Portfolio can simply buy the securities within their chosen stockbroking platform.
  • Hybrid security tickers consist of four or five letter codes, such as MYBG or MXUPA (which are MYOB Hybrids and Multiplex hybrids respectively).
  • Unlike ordinary shares, there is less of a need to 'time the market'.
  • Hybrids are far less volatile instruments and any volatility usually stems from changes in the cash rate and perceptions about the companies' ability to repay its debt.
  • Because we usually hold our hybrids for many years, any time is an ideal time to invest in/follow the Income Strategy.
  • You can expect your Income Strategy hybrids to pay a coupon either quarterly or semi-annually. For your convenience, we note the interest payment date inside our recommendations within the Rivkin Local Members' Home.
  • Just like a dividend, these coupon payments will be paid to you via your nominated bank/share trading account that is linked to your stockbroking account, or by cheque if you have not elected to receive electronic payments.
  • Because we usually hold our hybrids for many years, there any time is an ideal time to invest in/follow the Income Strategy.
  • Of course, we regularly review our holdings and whenever we believe a holding has become too expensive or another opportunity has become more desirable to hold than an existing holding, we will rebalance the strategy accordingly by issuing advice to all Rivkin Local members.
  • When a company issues a hybrid security, they have a face value, which is the price that lenders will be paid upon redemption. For example, if ABC Company Pty Ltd wishes to borrow $10,000,000 from investors to expand its operations, it might issue 100,000 hybrid securities at a price of $100 each. To take on the risk of ABC Company Pty Ltd defaulting on its repayments, investors will demand a rate of return that rewards them for taking on the risk of being a lender.
  • As hybrids are tradeable in the secondary market (that is, the ASX), the price can fluctuate.
  • The coupon rate is the amount of interest payable versus the face value at the time of issue. So at the time of listing, ABC Company Pty Ltd might offer investors $8.50 per annum as a return on their $100 hybrid. This $8.50 would be known as the coupon. The yield is the amount of that annual coupon versus the current price. So if ABC Company Pty Ltd’s hybrids are trading at $100, then the $8.50 coupon would equate to an 8.50% yield (i.e., the coupon of $8.50 divided by the current hybrid price of $100).
  • Because the majority of the investments within the Income Strategy are held for the long term, brokerage rarely plays a role in deciding how much to invest. However, as we usually hold at least five inclusions within the strategy, it makes sense to invest no less than $10,000 in total.
  • Based upon five holdings, this would equal $2,000 per holding and at Rivkin’s minimum internet broking rate of $11 inc. GST, you would be charged $55 for your five purchases, equating to 0.55% of the $10,000 sum total. That percentage will shrink as your allocation to the strategy increases. If you invested $50,000 in the strategy split over five $10,000 holdings, for example, Rivkin’s fees would still be $55 in total, but the percentage versus the entire investment would be 0.11% of the $50,000 sum total.

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Disclaimer: This article contains information about hybrid securities, which are considered complex financial products. Please click here to read the ASX's "Understanding Hybrid Securities" document before considering an investment in hybrid securities. 

DISCLAIMER: Rivkin aims to provide clear and simple information to those visiting our website. If any part of this disclaimer does not make sense, please phone Rivkin and ask to speak with a member of our Dealing and Relationship Management Team. Rivkin provides general advice and dealing services on securities, derivatives and superannuation (SMSF). Rivkin also provide SMSF administration and accounting services. Rivkin does not provide advice that takes into account your, or anybody else's, investment objectives, financial situation or needs. We strongly suggest that you consult an independent, licenced financial advisor before acting upon any information contained on this website. Investing in and trading securities (such as shares listed on the ASX) and/or derivatives (such as Contracts for Difference or 'CFDs') carry financial risks. CFDs carry with them various additional risks that differ from more simple securities such as fully-paid company shares. Some of these risks include not owning the underlying instrument from which a price is being derived, settling trades 'over the counter' with a financial institution rather than on a stock exchange, and using leverage to gain access to trades that may have a higher face value than your initial deposit. This risk of leverage means that it is possible to lose more than your initial investment. Our aim is to create more life choices for our clients, which means improving the wealth of clients throughout many market cycles by nurturing a relationship spanning many years. If you are not comfortable with your understanding of the risks involved before using a Rivkin product and service, please contact our office to seek further information or a Product Disclosure Statement, or make an appointment to sit with one of our friendly financial experts. It is in our interest for your Rivkin experience to be a rewarding and comfortable one. Rivkin is a trading name of Rivkin Securities ABN 87123290602, which holds Australian Financial Services Licence No. 332 802.