Dividend Yield Play - Instalments - Portfolio Study

A strong dividend income stream can be the cornerstone of an investment portfolio, especially where cash flow is crucial. Australian companies offer a relatively high dividend yield compared to their global counterparts, which investors can find attractive.

A strategy that can be used to generate a recurring income stream is the Dividend Yield Play' (DYP). The Dividend yield play strategy involves participating in multiple dividends by using the same amount of capital and rolling that initial capital between companies based on the payment dates of their dividends.

Instalments allow you to gain exposure to shares (and other securities) by making a part payment upfront and delaying an optional final payment until a later date. This allows you to buy shares for a fraction of the current share price while receiving the benefits of capital growth, dividends and franking credits. As a result you are able to purchase an increased exposure to the share, boosting the dividend income stream from the same capital investment.

For more information on the Dividend Yield play strategy please view the Dividend Yield Play factsheet (PDF 132KB).

Dividend Yield Play portfolio study

The Dividend Yield Play portfolio study uses the Dividend Yield Play strategy to compare the returns of a portfolio of shares to instalment warrants

To assist investors in understanding the dividend yield play strategy we have set up a portfolio and a number of house rules that we will follow.

      Portfolio study information
      Level Beginner to intermediate
      Investment style Active, short-term trading strategy
      Launched 01/01/2009
      Return for entire period 11.74% (shares)
      26.18% (instalments)
      Return for 2009 11.74% (shares)
      26.18% (instalments)
      Holdings N/A - Holdings vary over dividend periods

      * Return is total Return including income.