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ISA tips: six funds for income seekers

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Written by: Darius McDermott
06/03/2019
If you're looking for some ideas to generate an attractive level of income from your ISA investments, the good news is that there is plenty of choice: from UK dividend-paying companies to commercial property and emerging market bonds.

To make life easier, we’ve identified six funds, offering access to different asset classes. which could fit the bill.

A reliable income

Lowland Investment Company

Lowland Investment Company, which currently yields 3.93%, has raised its dividend every year since 1975 with the exception of 2009 when it remained unchanged. This listed fund invests in UK companies of all sizes and could represent a good option for investors seeking a reasonable level of income today, as well as growth in income and capital over the long-term.

A growing income

Fidelity Global Dividend

This is a core global income fund which invests in transparent and sustainable businesses all around the world. From the US to China, Germany to Japan, the fund is unconstrained in terms of where it can invest and may avoid some countries or sectors altogether. It aims to pay a regular and growing income while preserving capital. The yield is currently 2.64%.

A rental income

TIME:Commercial Freehold

This fund acquires commercial freehold ground rents and commercial freehold property (known as ‘long income property’), which benefit from long rental leases. It targets an income of 4% per annum (currently 4.25%) and capital growth. Owing to its low correlation to bonds and equities, it can serve as an excellent diversifier in a portfolio.

A flexible income

TwentyFour Dynamic Bond

With the ability to invest in all types of bonds, this fund has a flexible approach which means it can take advantage of changes in market conditions. It differs from most strategic bond funds on account of its consistent weighting to asset-backed securities, an area of expertise for the team. It currently yields 4.53%.

An alternative income

First State Global Listed Infrastructure

This fund provides investors with access to an asset class that is known to offer diversification within portfolios. The fund aims to provide investors with a mix of capital growth and inflation-protected income (currently 2.96%), by investing in listed infrastructure companies around the world.

A diversified income

BMO MM Navigator Distribution

This multi-manager, multi-asset portfolio generally holds between 25 and 35 individual funds – each producing their own income. Investing in bonds, equities and other specialist income-producing assets, this fund offers diversification and balances risk. The team aims to deliver a high and reliable income (currently 5.1%), with the potential for capital growth.

Darius McDermott is managing director of Chelsea Financial Services

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