Vanguard LS - dividends / income

Skibunny40

Hi


Excuse my ignorance, but I'm trying to get my head round all this investment stuff, and need your help!


I want to invest in S&S ISA's that are focused on income rather than growth and the Vanguard LS funds seem to meet that need from what I've read...but when I looks at the HL website, it says the historic yield for the 100% equity fund was around 1.5%, and it pays out annually. I thought yield was the same as dividend - which would mean an income fund only paid out 1.5% "interest" last year? That can't be right, can it?


So what am I mis-understanding?


Thanks

ColdIron

Depends upon what you've read. I wouldn't call the VLS an income fund

Drp8713

I don't see VLS as an income focused fund, it's a multi asset tracker.

Have a look at this for ideas

http://www.thisismoney.co.uk/money/diyinvesting/article-1616089/ISA-INVESTING-TIPS-Fund-trust-ideas-income-investors.html

There is obviously loads more and bond funds to consider which could get you 6-7%.

Skibunny40

Thanks!


6-7% sounds way better - I guess I need to do lots more reading!

Thrugelmir

Skibunny40 wrote: »

6-7% sounds way better - I guess I need to do lots more reading!

With the FTSE 100 yielding an average of 3.5%. At those levels make sure that the yield isn't in part a return of capital. As while you may obtaining a high income , your capital maybe diminishing along with the room for income growth.

ChesterDog

It won't be as broad-based as a Vanguard LS fund, but Neil Woodford (worth a Google if you don't know the name) is about to launch an equity income fund. The remit, I believe, will be to beat FTSE 100 income by at least 10% (that means if the FTSE 100 yields 3% then the target is 3.3%, not 13% ) with growth on top.

BLB53

VLS is a global fund - only around 10% of the return comes from UK listed equities. The largest weighting is the USA where equity income yield is under 2% - less than half the yield of the UK.

If you want income, have a look at some of the UK income investment trusts - City of London, Edinburgh, Murray Income etc - currently yielding just under 4%.