ISA Choices Focus on Income
Focus on Income
The fund aims to produce a rising income with capital growth from a portfolio primarily made up of investments in the UK including ordinary shares, convertibles and fixed interest securities. Although mainly focused on the UK, the managers have the option to invest in foreign companies if an opportunity does not exist in the UK or they can get better value overseas. Headed by Adrian Frost, the managers are constantly looking at ways to improve the process to avoid complacency, while delivering strong long-term income and growth, though there are no guarantees. The fund has an annual yield of over 4% and is featured on our First Class Funds list.
Invesco Monthy Income Plus (UK)
This fund sits in the Strategic Bond sector, which means that the managers have the flexibility to invest in different types of bond (for example government, corporate, high yield) to shape the portfolio to best reflect current market conditions. It aims to achieve a high level of income together with capital growth over the long term, investing primarily in high yielding securities globally with a smaller proportion invested in equities. The fund has been popular with our clients for many years and features on our First Class Funds list. It has an excellent track record and is currently yielding 5% per annum.
Threadneedle High Yield Bond
The fund aims to provide income, outperforming the relevant index over rolling 3-year periods, after the deduction of charges. It is actively managed by David Backhouse and Roman Gaiser and invests at least two-thirds of its assets in bonds issued by companies worldwide which are rated below investment grade. The fund predominantly invests in high yield corporate credit, issued within Europe. The investment approach is based on a rigorous in-house bottom-up research process. This has driven the belief that company specific attributes are key factors in driving changes to the underlying creditworthiness of an issuer. It has a good track record and is yielding just over 4% a year.
Schroder Income Maximizer
The fund is based on the popular Schroder Income fund and targets an annual yield of 7%, however this is not guaranteed. It aims to provide income and some capital growth by investing in equities of UK companies. In addition to the income from dividends in the fund uses a complex financial instrument known as the “covered call option”. Covered calls involve selling the right to buy shares in a company you own, at a specific price, within a specified short-term time frame, for which you receive a premium. If the stock doesn’t reach the specified price, you keep the shares and the premium. If the stock is above the agreed price at the end of the contract, you sell the shares but keep the premium to boost income returns. Read the Fund Brochure below for a more detailed explanation on this process or watch Rupert Rucker from Schroders give an explanation on how an equity fund can pay a higher income using a derived overlay.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice from an independent financial adviser.