If you're looking for some ideas on how to generate attractive level of income from your investments, the good news is that there is plenty of choice: from UK dividend paying companies right through to emerging market governments bonds, there is bound to be a fund out there that fits the bill. To make life easier, we've identified four funds which, between them, offer a variety of different income streams.
Headed up by Rob Baltzer and Lucy Isles, this fund aims to provide a high level of income through a portfolio of mostly UK and European bonds. However, it has the ability to invest anywhere around the globe. As with most Baillie Gifford funds, the managers adopt a long-term time horizon when it comes to holding investments, which means turnover is low.
To mitigate company-specific risk, Rob and Lucy are notably very critical of each firm they look at, and constantly challenge their own assumptions about both market perceptions – and their own perceptions – of investments. It has a current yield of 4.1%*
This fund will tend to hold around 50 stocks at any one time – which means it has a high-conviction portfolio, given the number of investable companies across the globe.
He adopts a total return approach to portfolio construction and focuses on companies with the potential to grow their dividends over the long term. As such, investors should not expect it to be one of the highest-yielding funds in the sector. However, it could dovetail nicely with a higher-yielding, lower-growth offering. The current yield is 2%*
One of our four VT Chelsea Managed funds, this fund-of-funds is able to invest across any asset class and, at any one point, could have exposure to equities, bonds, money market instruments and cash. It can also have indirect exposure to the likes of commodities and infrastructure, which helps it to achieve an attractive yield - which currently stands at 4.5%**.
In fact, some of the fund's exposure to infrastructure is already yielding 6%, and the management team expect this to increase over the medium-to-long term.
Finally, for those looking to generate regular income, Artemis Monthly Distribution could be a good option. It is made up of both bonds and equities to offer investors asset class diversification; the bond portion of the fund is headed up by James Foster, who also manages Artemis Strategic Bond while the equity half is managed by Jacob de Tusch-Lec, manager of Artemis Global Income.
James and Jacob share and discuss investment ideas, combining individual stock selection with views on the broader economy. This means the fund is less volatile than many of its income-focused peers, and pays out an attractive stream of income (currently 4.08%*) on a monthly basis.
*Source: FE Analytics as at 28 February 2018
**Source: Chelsea Financial Services as at 28 February 2018