Income funds a good choice?

rich_b

Hi all and thanks for the replies. I'm not quite sure we've got a consensus yet though so I'm still unsure whether I'm making good choices.

Something to add is that I've looked at the L&G pension fund fact sheets and they don't mention whether each fund is accumulation or income at all. When I look at the same funds using Trustnet that's where I saw some listed as 'income'.

@dunstonh - I suspect you may be right as I'm somewhat of a novice at this. Here is an example of an equity fund - L&G Aberdeen Global Growth Ex UK Pn:

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=LAF65&univ=P

In the PDF factsheet for this fund it states:

Inc / Acc Income

So yes it is an equity fund and an income fund. So is an 'equity income fund' not the same as an 'income fund' then? Would it and other income funds like it be sensible choices for a pension fund (in regard only to accumulation vs income, of course)?

mania112

dunstonh wrote: »

There are not income funds in pension funds. They will be accumulation funds. However, I suspect you are mixing up things like equity income or fixed income bonds etc which are not income funds.

No confusion here, income funds are available in a pensions.

mania112

rich_b wrote: »

Hi all and thanks for the replies. I'm not quite sure we've got a consensus yet though so I'm still unsure whether I'm making good choices.

Something to add is that I've looked at the L&G pension fund fact sheets and they don't mention whether each fund is accumulation or income at all. When I look at the same funds using Trustnet that's where I saw some listed as 'income'.

@dunstonh - I suspect you may be right as I'm somewhat of a novice at this. Here is an example of an equity fund - L&G Aberdeen Global Growth Ex UK Pn:

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=LAF65&univ=P

In the PDF factsheet for this fund it states:

Inc / Acc Income

So yes it is an equity fund and an income fund. So is an 'equity income fund' not the same as an 'income fund' then? Would it and other income funds like it be sensible choices for a pension fund (in regard only to accumulation vs income, of course)?

Whether we can agree there is such a thing as an income fund in a pension, we DO agree Accumulation units are right for you.

You have 2 layers (for want of a better word) - the first is it's target. Does the fund aim to grow/accumulate or does the fund aim to pay income.

Then you have the way in which the fund actually grows. You start off by buying units in the fund at the going rate. Accumulation units grow in size. Income units grow in volume. In a pension, income can't be put in your pocket, so units are reinvested.

The second 'layer' isn't for you to really worry about, it's mechanics.

Lokolo

rich_b wrote: »

So yes it is an equity fund and an income fund. So is an 'equity income fund' not the same as an 'income fund' then? Would it and other income funds like it be sensible choices for a pension fund (in regard only to accumulation vs income, of course)?

No.

So you are right in saying it is an Income fund. So, as you say, you can have Acc or Inc.

However you can also invest in funds that specifically invest in equities that bring in income. So examples of these, a fund would invest in Shell/BP, Vodafone, then the dividends they get from these shares are then distributed. An example of these - http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/veritas-global-equity-income-b-gbp-retail-income (although it does only come in Inc version!)

rich_b

mania112 wrote: »

Whether we can agree there is such a thing as an income fund in a pension, we DO agree Accumulation units are right for you.

That is a problem because there are limited funds (40) to me to choose from and some of the better ones (for my goals) are listed as 'income', not 'accumulative'.

mania112

rich_b wrote: »

That is a problem because there are limited funds (40) to me to choose from and some of the better ones (for my goals) are listed as 'income', not 'accumulative'.

If it says income in the title, it's not a problem, it doesn't mean it's not an acc.... confusing i know.

Point is, whether it really is inc or acc, isn't important - it's historical performance and your attitude to risk.

rich_b

mania112 wrote: »

If it says income in the title, it's not a problem, it doesn't mean it's not an acc.... confusing i know.

I understand, but here's the list of funds I can choose from: http://www.trustnet.com/Factsheets/Product.aspx?productCode=LEGA0004&univ=P&tab=2
Onle one, a Newton fund, has income in the title but others (which don't) are listed in the factsheets as income rather than accumulative.

Point is, whether it really is inc or acc, isn't important

Which is what I was hoping to hear!

dunstonh

I understand, but here's the list of funds I can choose from: http://www.trustnet.com/Factsheets/P...4&univ=P&tab=2
Onle one, a Newton fund, has income in the title but others (which don't) are listed in the factsheets as income rather than accumulative.

Having income in the title doest not mean it is income units. All the funds on that page are accumulation units as is the norm with pension funds.