Income Shares

What is Income Share.?

The core concept behind income share is drastically different from that of growth shares. They typically have a low price and a low P/E. Simply put, income share can be defined as the shares offered by a dual purpose fund that does not have abundant space for capital appreciation, but fetches the holder a section of all income earned in the portfolio.
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Companies generally follow a policy of high payout, and eventually experiences reduced reserves for growth.

These shares usually attract those investors that seek a safe and steady flow of income rather than outright capital appreciation. The holders often get their share of all income created in the portfolio in addition to any extra return on the stock’s par value around the time of the complete dissolution of the fund.

Edited and Updated 15th February 2014

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