Keeping Investment in Income Units Rather Than Accumulation Ones

george4064

ColdIron wrote: »

HL don't charge for selling one fund and purchasing another

In addition, there might be other transaction costs such as bid/offer spread depending on the fund.

george4064

Bravepants wrote: »

I have started to "experiment" with monthly income funds, not with my entire portfolio but a portion of it, just to see how effective and stable they are in providing income compared to capital volatility. I'm with darkidoe in that I would rather try to avoid selling units in retirement (hopefully only a few years off) and I would rather experiment while I'm working than after retirement.

If you haven’t already, I would recommend you follow JohnRo’s monthly income thread here: https://forums.moneysavingexpert.com/discussion/4662291/monthly-income&highlight=monthly+income

soti84

Thank you all for your valuable comments and suggestions. Much appreciated.

AnotherJoe

In the long term inc units will result in slightly lower growth because you will have less money invested overall.

Bravepants

Is it true to say though that as the capital value falls the yield increases, and so the income (say monthly) would stay the same or very close?



I mean apart from yield falling because some companies held in the fund would retain more profits to grow the company and thus improve share price.

masonic

Bravepants wrote: »

Is it true to say though that as the capital value falls the yield increases, and so the income (say monthly) would stay the same or very close?

I mean apart from yield falling because some companies held in the fund would retain more profits to grow the company and thus improve share price.

Often capital values fall during times when company earnings are falling and coincides with or immediately precedes dividends being cut.