ISA tips: six funds for income seekers
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
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