The UK Income fund Heatmap

Most investors can be classed as 'growth investors'. That means they are focused on growing their investments by seeking the best return. In reality that total return is made up of growth in the capital value of their investments and the income they produce. The automatic reinvestment of that income boosts investment returns by the magic of compounding. That is, the income can be used to buy more fund units or shares which in turn can produce even more income and capital growth and so on and so on.

Yet there is a second group of investors known as 'income investors' who want to live off the income that their investments produce while the capital value of their investments hopefully grows at the same time. The trouble is that picking the right investments is incredibly difficult even if you decide to invest via funds.

Income investors and financial advisers make the same mistakes when trying to build an income portfolio.