The best funds for monthly income

11 min Read Published: 26 Jan 2015

best funds for monthly incomeI was asked by the excellent Mark Bridge from The Times newspaper for my views on the best funds for monthly income. They formed part of his wider article 'The best financial products for income', which also looks at savings and current accounts. It is well worth a read. As an 80-20 Investor subscriber I share with you my full analysis, including the alternative assets that can provide a good source of monthly income.

Best funds for monthly income

When it comes to picking funds for income most investors will simply focus on funds with the highest yield figures. Yet what they are overlooking is that a higher yield figure equates to higher investment risk, almost without exception as the fund manager is having to take more risks to generate the higher yield.

If you look at the average yield on funds within the various sectors often associated with generating income they are

  • Sterling High Yield Bond - 6.06%
  • UK Equity Income – 4.07%
  • UK Equity Bond & income – 3.46%
  • Sterling Corporate bonds 3.42%
  • Global Equity Income - 3.33%

That provides a benchmark of sorts for the average yields on offer.

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