Both terms are related to the income you receive or may receive from an investment, but they have distinct meanings:
Payout Rate: This is the rate at which a specific amount is distributed to investors from the Income+ portfolio. It's typically expressed as a percentage of the invested amount and represents the regular income investors can expect to receive annually.
Portfolio Yield: This refers to the annual income generated by the portfolio's investments as a percentage of the portfolio's total value. It provides a measure of the average return on the portfolio's current investments in terms of income. Portfolio yield can vary based on the underlying investments' performance and changes in market conditions.
In simpler terms, the payout rate is what you, as an investor, can expect to receive regularly, while the portfolio yield is a measure of the income generated by the investments themselves. The two might not always align perfectly because the portfolio could reinvest some of the income or use principal to maintain a consistent payout rate.