When investing for income using your ISA allowance, and you are looking for monthly income one way to do it is to invest in more than one fund. Many fund providers offer income yielding funds that offer quarterly income and we have highlighted three funds when invested in together provide investors with a monthly income. By investing via your ISA allowance, not only will you benefit from tax free income but you will also benefit from capital gains tax exemption on any returns you make.
Standard Life Higher Income
• Yield 6.36% (variable, not guaranteed)
• Income paid quarterly - January, April, July, October,
With a current effective yield of 6.36%, this fund is aims to provide a significantly higher level of income than is generally available on gilts. This is achieved by investing mainly in Sterling and Euro denominated sub-investment grade corporate bonds.
Fund manager David Ennett and his investment team actively oversee the fund and may also invest in other bonds, such as investment grade corporate bonds and government bonds, if and when they spot good opportunities in these areas.
Find out more about the Standard Life Higher Income Fund.
Newton Asian Income
• Yield 5.0% (variable and not guaranteed)
• Income paid quarterly - February, May, August, November
Newton Asian Income is one of a growing number of investment funds extracting a mix of capital growth and dividend income for investors from the expanding economies of South-East Asia. Asia is developing a strong dividend culture, making it the leading region for income. Of course, there are risks to investing in emerging (and possibly more volatile) markets – for example, regulations may be less stringent. To counter this possibility, the fund operates with a defensive slant, investing in companies with robust balance sheets and the ability to pay cash to shareholders. Within the investment itself, diversification is offered via the fund’s exposure to a range of different South East Asian economies and currencies, ranging from Australia and New Zealand to Thailand and the Philippines.
Find out more about the Newton Asian Income Fund
Kames Sterling Corporate Bond
• Yield 4.1% (variable and not guaranteed)
• Income paid quarterly - March, June, September, December
Managed by David Roberts and Iain Buckle, this fund has recently benefitted from strong performances by holding including Barclays, Lloyds Banking Group and Direct Line. Notable recent performers in the Kames Sterling Corporate Bond have also included Center Parcs, Enterprise Inns and Punch Taverns.
Up to 10% of the Kames Sterling Corporate Bond Fund may be invested in high yield bonds, normally bonds from institutions with lower credit ratings. In order to take advantage of new opportunities, some investments may also be made in deposits, the money market and derivative instruments.
Find out more about the Kames Sterling Corporate Bond fund
Investing using a Fund Supermarket
By using Fair Investment’s Fund Supermarket you can save up to 20% on the Annual Management Charge (AMC) levied by many fund managers. This rebate is paid into a cash account which is set up for you when you first invest.
The value of any investment can fall as well as rise, so remember that you may not get back your initial investment. Every investor has different aims and objectives, and so it’s wise to seek independent financial advice if you are unsure what investment is right for you.
Income yields quoted are correct as at 6th March 2013.
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