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Model Portfolio for Income Investors, October 2025
ByAinvest
Thursday, Oct 9, 2025 7:13 pm ET2min read
This model portfolio is designed for investors seeking income, either for retirement or immediate withdrawal. It combines the best ideas from BDCs, MLPs, CEFs, option income funds, and REITs. The portfolio aims to provide a stable source of income for investors.
Investors seeking a stable source of income, whether for retirement or immediate withdrawal, can benefit from a diversified portfolio that combines the best ideas from Business Development Companies (BDCs), Master Limited Partnerships (MLPs), Closed End Funds (CEFs), option income funds, and Real Estate Investment Trusts (REITs). This model portfolio is designed to provide a consistent income flow, adjusted for inflation, and includes a mix of monthly and quarterly distributions.Key Components of the Model Portfolio
1. Business Development Companies (BDCs)
- Ares Capital Corp. (ARCC) offers a quarterly dividend with a 9.76% yield and a 10-year total return of 229% [1].
- FIDUS Investment (FDUS) stands out with a 11.35% yield and a 10-year total return of 315% [1].
- Kayne Anderson BDC, Inc. (KBDC) provides a 11.79% yield and is known for its conservative lending standards [1].
2. Bond Funds
- Ares Dynamic Credit Allocation Fund, Inc. (ARDC) offers a monthly dividend with a 9.81% yield and a 72% 5-year total return [1].
- PIMCO Dynamic Income Opportunities Fund (PDO) pays a monthly distribution with a 10.82% yield [1].
- PIMCO Income Strategy Fund II (PFN) has a monthly distribution with an 11.28% yield [1].
- Cohen & Steers Tax-Advantaged Preferred Securities and Income (PTA) offers a 7.84% yield and a -3.48% discount to NAV [1].
- Western Asset Diversified Income Fund (WDI) provides a 11.9% yield and pays distributions monthly [1].
3. Master Limited Partnerships (MLPs)
- Enterprise Products Partners L.P. Common Units (EPD) offers a 6.89% distribution yield and a 5-year gain of +84% [1].
- MPLX LP Common Units (MPLX) provides a 7.83% distribution and a 5-year price increase of +179% [1].
- FT Energy Income Partners Enhanced Income ETF (EIPI) offers a 8.7% yield and monthly distributions [1].
4. Dividend Income Funds
- BlackRock Health Sciences Trust (BME) yields 8.28% with monthly distributions and trades at a -8.26% discount to NAV [1].
- Eaton Vance Tax-Advantaged Dividend Income Fund (EVT) offers an 8.0% annual dividend yield and a 10-year total return of +182% [1].
- Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (ETO) provides a 7.42% forward yield and a 10-year total return of 196% [1].
Conclusion
This model portfolio is designed to provide a stable source of income for investors, combining the strengths of various income-generating assets. By diversifying across BDCs, bond funds, MLPs, dividend income funds, and REITs, the portfolio aims to mitigate risks associated with overreliance on a single income source. Investors should consider their individual risk tolerance and financial goals when constructing their own income-focused portfolios.
References
[1] Seeking Alpha. (2025). Model Portfolio for Income - October 2025. Retrieved from https://seekingalpha.com/article/4828979-model-portfolio-for-income-october-2025
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