ABI targets income from physical assets like real estate, infrastructure, and commodities rather than traditional bonds. It's designed for investors seeking yield that's less sensitive to interest rate movements than conventional fixed income.
How It Works
The fund allocates across REITs, MLPs, infrastructure companies, and commodity producers that generate cash flow from tangible assets. Holdings are weighted by a combination of yield and asset quality metrics, with quarterly rebalancing to maintain income focus while avoiding yield traps. The strategy emphasizes assets with pricing power during inflationary periods.
Key Features
- Yields 4.15% from hard assets vs bonds at similar yields
- Natural inflation hedge through real asset exposure
- Zero expense ratio makes it cheapest asset-based income option
Risks
- Commodity price crashes could cut distributions 30-40% in severe scenarios
- MLP tax complexity creates K-1 headaches for some investors
- Real estate allocation means 20-30% drawdowns possible in property crashes
Who Should Own This
Best for income investors worried about inflation eroding bond returns or those who want yield without duration risk. Works as a 5-10% portfolio diversifier for retirees who can handle moderate volatility in exchange for inflation-resistant income. The zero expense ratio makes it particularly attractive for cost-conscious investors building alternative income streams.