In my last portfolio update, I wrote that the market had fallen, but the income machine kept working.
At the time, that felt like the right summary of early 2026. Capital values had taken a hit, the portfolio was down overall, but the income stream was still doing its job. The factory had not stopped. It was still producing.
This latest update tells the next part of that story.
From 1 January 2026 to 24 April 2026, my income portfolio has moved from a rough start to a much healthier position. The portfolio finished the period with a value of $655,433.97, total dividends and income of $13,008.85, and an overall positive return of $13,264.52.
That is a big shift from the March update.
The headline is simple:
the income kept arriving, and capital values began to recover.
That is exactly the kind of combination I want from My Income Factory.
A quick reminder: where we were in March
In the previous update, covering 1 January to 9 March 2026, the portfolio was still underwater for the year.
The portfolio value was around $629,520, the total return was negative, and the main positive was the income generated along the way. My conclusion at the time was that the income engine was still working, even though the capital side of the portfolio looked weak.
That was the emotional test.
It is one thing to talk about income investing when every asset price is rising. It is another thing to stay calm when the screen is red and the portfolio value is going backwards.
That is where income investing earns its keep. The cash flow gives me something real to focus on while the market sorts itself out.
And now, a few weeks later, this latest report shows why patience matters.
The big picture: the portfolio is back in positive territory
The portfolio ended the period at $655,433.97.
Across the full period from 1 January to 24 April 2026, the portfolio generated:
- Capital gains: $257.40
- Dividends and income: $13,008.85
- Currency movement: -$1.73
- Total return: $13,264.52
This is the part I find most encouraging.
Capital gains were basically flat overall. The market gave a little, took a lot, and then gave some of it back. But the income kept building in the background.
In other words, the portfolio’s positive result for the year so far has been driven almost entirely by income.
That is not a flaw. That is the design.
My portfolio does not need every holding to surge higher to make progress. If the assets continue to throw off cash, and if I can reinvest that cash sensibly over time, the strategy can still move forward even when capital growth is patchy.
That is the quiet power of income investing.
Portfolio snapshot: the factory floor
As at 24 April 2026, the portfolio was spread across the following broad areas:
| Portfolio bucket | Value | Capital gains | Income | Total return |
|---|---|---|---|---|
| Passive ETFs | $242,100.79 | -$410.97 | $4,673.04 | $4,262.07 |
| Direct Shares | $109,919.87 | -$1,294.37 | $2,318.55 | $1,024.18 |
| Income Holdings | $205,941.74 | $6,689.47 | $4,043.30 | $10,732.77 |
| Credit Funds | $96,592.51 | -$4,726.73 | $1,973.96 | -$2,754.50 |
| Cash | $879.06 | — | — | — |
| Total Portfolio | $655,433.97 | $257.40 | $13,008.85 | $13,264.52 |
That table says a lot about how the portfolio is behaving.
The income holdings did the heavy lifting. This bucket delivered the strongest contribution, with more than $10,700 in total return. It was helped by both capital gains and income.
The passive ETF bucket also contributed positively, mostly through dividends rather than capital growth.
The direct shares sleeve was modestly positive overall, despite some sharp falls in individual names.
The weakest area was clearly credit funds, which were down overall. That was driven largely by capital weakness in listed credit vehicles, even though the underlying income stream remained positive.
The income bucket carried the portfolio
The star of this update was the income bucket.
This part of the portfolio includes holdings such as VHY, SOL, BKI, DUI, HYLD, WHF, WHI, JEGA and JPEQ. Together, they finished the period with a value of $205,941.74 and delivered a total return of $10,732.77.
The standouts were clear.
SOL was the biggest contributor, with a total return of $7,306.31. That was made up of $6,447.80 in capital gains and $858.51 in dividends.
VHY also performed strongly, with a total return of $5,959.67, including $1,759.43 in dividends.
BKI added $509.61, while HYLD contributed $409.95.
This is exactly why I like having a dedicated income sleeve in the portfolio. It gives me exposure to assets designed around income, but still leaves room for capital growth when market conditions improve.
Of course, not everything worked.
WHF was a notable drag, with a negative return of -$2,435.42. DUI was also down -$688.82, and the global equity premium income ETFs — JEGA and JPEQ — were still negative over the period.
But the overall result from this bucket was strong.
The income sleeve did what I wanted it to do: it produced cash flow and helped pull the portfolio back into positive territory.
Passive ETFs: boring, broad, and still useful
The passive ETF bucket finished at $242,100.79, with a total return of $4,262.07.
The interesting part is that capital gains were still slightly negative at -$410.97, but income came in at $4,673.04.
That is a useful reminder of why I keep broad ETFs in the portfolio.
They are not always exciting. They do not give me the same feeling as picking an individual winner. But they give me diversified exposure and, importantly, they still contribute income.
VAS was the main contributor, generating $3,584.28 in total return, including $3,411.69 in dividends. A200 added $778.31, while VLC contributed $766.67.
The weaker spots were VGS, down -$525.87, and VSO, down -$341.32.
That makes sense in the context of a mixed market. International shares and small caps can be more volatile, and they have not been the smoothest part of the portfolio this year.
Still, as a group, the ETFs did their job.
They added income, kept the portfolio diversified, and helped stabilise the overall result.
Direct shares: a mixed bag, but income helped
The direct shares bucket finished at $109,919.87, with a total return of $1,024.18.
That result was made up of -$1,294.37 in capital movement and $2,318.55 in dividends.
Again, the pattern is familiar:
capital was messy, but income softened the blow.
The strongest contributors were New Hope (NHC), Telstra (TLS), Woodside (WDS), Viva Energy (VEA), Aurizon (AZJ), APA Group, and Macquarie Group.
The standout was New Hope, which delivered a total return of $2,672.28. Telstra also performed well, adding $1,515.89, while Woodside contributed $862.29.
But there were also some painful numbers.
Nick Scali was down -$2,020.88, Ansell fell -$1,043.98, Harvey Norman was down -$919.28, and Credit Corp declined -$586.89.
This is the part of the portfolio that reminds me why direct shares require discipline.
Individual companies can deliver excellent results, but they can also hurt. The aim is not to avoid every loser — that is impossible. The aim is to make sure no single holding can derail the whole income strategy.
So far, that balance is holding.
Credit funds: income arrived, but listed prices remained under pressure
The credit funds bucket was the weakest part of the portfolio.
It finished at $96,592.51, with a negative total return of -$2,754.50. That was made up of -$4,726.73 in capital movement, partly offset by $1,973.96 in income.
This is an important lesson.
Credit funds and income-style investments can still experience capital volatility, especially when they are listed on market. Even if the underlying loans or credit assets continue generating income, the listed price can move around based on sentiment, liquidity, and changing investor appetite.
The biggest drag was MOT, which was down -$2,844.56. KKC was also negative at -$774.34.
On the positive side, La Trobe 12 Month contributed $242.09, Plenti added $233.94, GCI added $84.58, and smaller P2P positions continued to contribute modest amounts of income.
This is why I do not look at credit funds purely through the lens of short-term price movement. I care about income durability, credit quality, diversification, and whether the distributions remain supported.
That said, this bucket deserves ongoing attention. I want income, but I do not want to ignore risk in the search for yield.
The real lesson: income changes how volatility feels
The most important number in this update is not the portfolio value.
It is not even the total return.
For me, the number that matters most is $13,008.85.
That is the amount of income generated over the period.
That income changes the emotional experience of investing. It gives me something tangible to focus on when prices are noisy. It reminds me that the portfolio is not just a collection of fluctuating numbers on a screen. It is a set of assets producing cash flow.
This is the heart of the Income Factory idea.
A factory is not judged only by what someone might pay for the building today. It is judged by what it produces.
And this portfolio is producing.
How this update connects to my March post
The March update was about staying calm when the portfolio was down.
This April update is about seeing the benefit of that patience.
In March, the key message was:
the market fell, but the income machine kept working.
Now the message has evolved:
the income kept working, and the portfolio has started to recover.
That does not mean the rest of 2026 will be smooth. It probably will not be. There will be more volatility, more disappointing holdings, and more moments where the market tests my patience.
But this period reinforces why I am building the portfolio this way.
I want a diversified set of income engines. I want dividends from ETFs and LICs. I want direct shares that can provide both income and growth. I want carefully selected credit exposure. And I want the portfolio to keep generating cash even when capital values are unsettled.
So far in 2026, that is broadly what has happened.
Final thoughts
This has been a much better update than the March one.
The portfolio has moved back into positive territory, but the bigger story is the income. More than $13,000 has already come through the portfolio this year, and that cash flow is the foundation of the strategy.
Not every bucket is firing. Credit funds are still under pressure. Some direct shares have been ugly. A few income holdings have gone backwards.
But the factory as a whole is still working.
And for me, that is the point.
I am not trying to build a perfect portfolio. I am trying to build a productive one.
One that can take a few hits, keep paying income, and give me the confidence to stay invested through the messy parts of the market cycle.
So far, 2026 has been a useful test.
And the Income Factory is still humming.
How is your income portfolio tracking in 2026?
Are your dividends and distributions helping offset market volatility, or are you finding capital movements harder to ignore?
Leave a comment below and share how your own income machine is holding up this year.