Informed Choice chartered financial planner Martin Bamford was featured in the Sunday Times yesterday, in an article about where ISA investors could put their money to generate income.
Martin was asked by the Sunday Times to share our recommendations for income funds in the UK Equity, fixed interest and property asset classes.
For UK Equity, Martin suggested BlackRock UK Income, managed by Nick McLeod-Clarke and Adam Avigdori.
“It aims to deliver an above-average and growing income without sacrificing the potential for long-term capital growth through an investment in the shares of UK companies. This fund has a yield of 3.62% with retail investors paying a 5% initial charge and 1.5% annual management charge, with a Total Expense Ratio (TER) of 1.67%.”
In the fixed interest asset class, Martin suggested a strategic corporate bond fund which gives the fund manager greater flexibility to invest in higher yielding bonds. Martin recommended the M&G Strategic Corporate Bond fund, managed by Richard Woolnough.
“This fund has a yield of 4.09% and over the past year has returned 6.5% compared to a sector average return of 5.8%.”
Within the commercial property asset class, Martin picked the Ignis UK Property fund, which invests mainly in UK real commercial property, as opposed to the shares in property companies.
“It has a historic yield of 3.30% and has delivered performance of 8% over the past year and fallen less than its sector over five years.”
When constructing an investment portfolio for income, it is important to consider diversification across the various asset classes rather than investing your entire portfolio into a single type of investment.
With interest rates on cash remaining at historical lows, income investors should keep in mind that the yields available from investments are also likely to be lower than they have been historically. Higher yields mean taking greater risk with your money.
