Income Fund to compliment VLS 60/40

Catapult

I'm looking to invest in a cheap Income Fund to compliment my current investment in VLS 60/40. The L&G High Income fund is pretty cheap to own with a yield of around 5.90% paid quarterly. However, am I duplicating investment sectors/holdings by doing this? Objective is to use VLS for growth and L&G (or similar) for income over 15-20 years. Just after a steer on whether this is bonkers or not really.

xylophone

I'm looking to invest in a cheap Income Fund to compliment my current investment in VLS 60/40.

Who's a pretty fund then?:D

Anything here?

http://www.telegraph.co.uk/investing/funds/five-low-cost-stock-market-funds-maximum-income/

ColdIron

Using only high yield bonds isn't a strategy I would use, it's high up on the risk and volatility spectrum. Do you really need this high a level of income? What do you mean by complement VLS, are you retired and using the income or just trying to employ an additional strategy to 'compliment' your VLS? If you are drawing income I would cast my net wider and look at lower yielding corporate bonds, a range of equities and possibly property. As ever diversification is your friend unless your objectives can only be met by going out on a limb. Some Investment Trusts are particularly suited to income (if that is what you want) and have similarly low OCFs

Catapult

Thanks ColdIron, - it's the "employ an additional strategy to compliment your VLS" approach I'm thinking of. Timeline is 15-20 years before retirement; I'm not drawing income until then. It really is diversification options to sit along side the VLS that I'm looking at.

ColdIron

If you don't need high income then a high income bond fund would be pretty low on my list of solutions. Your VLS is already well diversified and probably doesn't need complimenting especially if your pot is small. If I were going to [STRIKE]meddle[/STRIKE] compliment it I'd look at something it doesn't already cover, maybe smaller companies, but unless your pot is large or you have a high conviction that it's allocation isn't suitable for you anymore I'd be inclined to leave things alone

MallyGirl

or maybe property?

bostonerimus

ColdIron wrote: »

If you don't need high income then a high income bond fund would be pretty low on my list of solutions. Your VLS is already well diversified and probably doesn't need complimenting especially if your pot is small. If I were going to [STRIKE]meddle[/STRIKE] compliment it I'd look at something it doesn't already cover, maybe smaller companies, but unless your pot is large or you have a high conviction that it's allocation isn't suitable for you anymore I'd be inclined to leave things alone

Agreed. With 15 years until retirement a high income fund seems like a strange asset to hold. I'd be looking at a little more equity exposure or maybe property, but VLS60 is perfectly fine

xylophone

Your VLS is already well diversified and probably doesn't need complimenting

...but might need complementing?:)

ColdIron

xylophone wrote: »

...but might need complementing?:)

I get post #2 now

xylophone

I get post #2 now

I'm just too subtle....:D

chrisgg

If you're looking to complement/diversify from the VLS 60, I'd suggest buying a small cap fund, a property fund, a China/India fund and maybe a gold holding. An equity income fund will generally hold many of the large cap companies already found in most tracker funds, and I'd caution against further fixed income given the already high weighting in VLS.