Yahoo Finance Telegraph's top 10 income funds to fund your retirement
The Income 10 highlights the best funds for regular payouts. The Telegraph 25 is the definitive list of our favourite funds and we also showcase the 10 best funds for growth, preserving your money, investing ethically and keeping costs low with ETFs
The Telegraph Income 10 is a shortlist of our favourite funds for Isa and Sipp investors seeking regular payouts from their investments.
The Income 10 is produced alongside the Telegraph 25, the definitive list of our favourite funds. It is intended as a more specialised list targeted at investors with a need for income. Most, but not all, funds on the Income 10 also feature on the Telegraph 25.
Britain's stock market is traditionally a strong source of income, despite last year's crash in dividend payments, a fact recognised by the number of funds investing in UK shares on the list.
Investing overseas for income also presents opportunities. These stock markets may not have traditionally paid as much income as London-listed shares, but they are growing those payouts.
But the list is not confined to funds investing in shares. Bond and property funds also feature, together with a "multi-asset" fund, generating income from a variety of sources.
Best income funds to fund retirement
1. City of London
No trust boasts a better dividend record than City of London, which has raised its payout in each of the past 55 years. This is combined with a high yield, of 4.9pc, from its investments mostly in British stocks listed on the FTSE 100, making the trust a solid income pick.
Charge: 0.36pc | Ticker: CTY | Five-year return: 24pc | Yield: 4.9pc
2. Man GLG Income
Henry Dixon, manager of the £1.7bn fund, doesn’t confine his search for dividends to British blue-chips. “Mid-cap” stocks from the FTSE 250 also feature, making up 39pc of his fund.
Charge: 0.9pc | Cheapest share class: D | Five-year return: 48pc | Yield: 4.6pc
3. TwentyFour Dynamic Bond
This fund has free reign to invest in whichever bonds the managers see fit. Solid returns, a 4.2pc yield and a broad spread of government and corporate bonds from around the world make for a good pick.
Charge: 0.78pc | Cheapest share class: I | Five-year return: 29pc | Yield: 4.2pc
4. Invesco Monthly Income Plus
A mix of bonds with a small portion of dividend-paying shares produces this fund’s 4.6pc yield, paid monthly, and solid returns. Last year, Paul Read, who had managed the bonds portion of the fund with Paul Causer since 1999, stood down.
He has been replaced by Rhys Davies, who has worked alongside both for seven years and is viewed as a safe pair of hands by analysts. Ciaran Mallon runs the shares portion.
Charge: 0.67pc | Cheapest share class: Y | Five-year return: 33pc | Yield: 4.6pc
5. TR Property
TR Property is an unusual investment trust in that the bulk of its portfolio is made up of shares in European property companies, though it does also own some buildings in the UK. That structure means it is easier for manager Marcus Phayre-Mudge to switch investments when markets change.
The trust yields 3.8pc and crucially has held its dividend during the pandemic, making use of reserves. Standard Life Investments Property Income, which it replaces, was forced to cut.
Charge: 0.63pc | Ticker: TRY | Five-year return: 83pc | Yield: 2.9pc
6. Artemis Income
Offering a yield of 3.4pc, this £4.7bn fund has consistently beaten the average returns of rivals and the stock market, even during a grim 2020 for dividend hunters. Managers Adrian Frost, Nick Shenton and Andy Marsh invest predominantly in FTSE 100 stocks.
Charge: 0.8pc* | Cheapest share class: I | Five-year return: 36pc | Yield: 3.4pc
7. Premier Miton UK Multi Cap Income
Gervais Williams and Martin Turner’s £930m portfolio was the best-performing fund investing in British dividend-payers last year, and one of only three to deliver a positive return. The managers, who seek to generate income from British stocks of all sizes, bucked a grim year for UK income investors thanks in part to insurance against a big FTSE 100 sell-off, which they cashed in as the pandemic hit.
Charge: 0.81pc | Cheapest share class: B | Five-year return: 57pc | Yield: 3.4pc
8. Artemis Global Income
Manager Jacob de Tusch-Lec has a bias towards “value” investing. That style has been out of fashion and was hit hard in the pandemic, but the past 18 months brought a return to form for a manager with a strong long-term track record. The £1.3bn fund is up 29pc over the last 12 months.
Charge: 0.87pc* | Cheapest share class: I | Five-year return: 48pc | Yield: 2.4pc
9. Scottish American
This £892m investment trust may offer a relatively low 2.4pc yield, but it has combined that income with strong capital returns. The shares have returned 103pc over the last five years, from a mix of mostly shares from around the world, combined with property and bonds.
Charge: 0.7pc | Ticker: SAIN | Five-year return: 103pc | Yield: 2.4pc
10. International Public Partnerships
Offering investors access to different income-paying assets to the other funds on the Income 10, this £2.5bn trust invests in infrastructure. Investments in schools, hospitals, court buildings and military housing produce its 4.4pc yield.
Charge: 1.17pc | Ticker: INPP | Five-year return: 35pc | Yield: 4.4pc
*Fund is available for a cheaper price on Hargreaves Lansdown
