Verus Investments explores how income versus price appreciation shapes portfolio construction, especially in a low-rate world where dependable cash flows have become more central to outcomes. It argues income has historically been more stable than price gains, even as falling yields challenge its role. The paper suggests investors may be underestimating how much total returns depend on income durability.
The Role Of Income In Portfolios
Verus Investments
Thomas Garrett, Connor Ridgeway
Research
11 Pages
Key Takeaways
Income Stability Matters: Income-driven assets like bonds delivered the majority of returns historically, with fixed income showing far lower volatility than equities over multiple decades.
Rates Drive Income Decline: Since the early 1980s, bond yields have steadily fallen from double digits to near 0%, reducing the income contribution to total returns.
Equity Return Composition: For U.S. equities, dividends contributed a minority share of total return, with price appreciation accounting for roughly 70–80% historically.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
