Income Fund suggestions for SIPP

Brenchk

Hi, I’m looking for suggestions for funds which provide income. Now I’ve searched and can find lots of suggestions… my core portfolio is currently spread between Fundsmith, Fidelity Index World, and National Grid… the latter will provide c5% income and maybe some growth too… I’d like to pare down Fundsmith into an income fund… I will retire in October this year…

I’d appreciate any suggestions for funds which provide an income… I have no other criteria in terms of geography, or industry concentration… What’s working for you… 

Thank you.

Marcon

Brenchk said:

Hi, I’m looking for suggestions for funds which provide income. Now I’ve searched and can find lots of suggestions… my core portfolio is currently spread between Fundsmith, Fidelity Index World, and National Grid… the latter will provide c5% income and maybe some growth too… I’d like to pare down Fundsmith into an income fund… I will retire in October this year…

I’d appreciate any suggestions for funds which provide an income… I have no other criteria in terms of geography, or industry concentration… What’s working for you… 

Thank you.

What choices does your SIPP provider offer?

Brenchk

A huge choice. A massive list and whilst I can dice and slice it I’ve no idea whether yield alone is the best choice. Some look very niche which is fine. For those already in drawdown I’d welcome any suggestions. Funds which are tried and tested with some historic performance would be good to hear. 🙏

Ciprico

City of London IT could be worth a look, or a simple ftse100 tracker....

FIREDreamer

Ciprico said:

City of London IT could be worth a look, or a simple ftse100 tracker....

FTSE-100 tracker would be a horrendous choice.

Maybe VHYL global high yield ETF  (not excessively high at circa 3%, so room for dividend growth).
Also JGGI Jupiter Global Growth and Income investment trust yielding about 4%.

MX5huggy

I don’t get income investing in equities, you’re just excluding whole sectors of companies because for tax reasons they don’t pay dividends preferring to sit on cash or invest for growth. 

dunstonh

MX5huggy said:

I don’t get income investing in equities, you’re just excluding whole sectors of companies because for tax reasons they don’t pay dividends preferring to sit on cash or invest for growth. 

It's an old-fashioned method, and periodically, it has worked very well.   However, typically you are looking at a bias towards UK equities and to older industries nowadays and they have largely been out of fashion for most of the last 15 years. 

ColdIron

VHYL is decent enough with a likelihood of some growth as well, or maybe look at some of the investment trust  'dividend heroes' with several decades of dividend growth behind them

https://www.theaic.co.uk/income-finder/dividend-heroes

Bostonerimus1

What's income? Interest, dividends, capital gains and maybe even spending some capital. So one way to generate those is a balanced portfolio of equities, bonds and cash. Take a look at "Total Return". 

Linton

Bostonerimus1 said:

What's income? Interest, dividends, capital gains and maybe even spending some capital. So one way to generate those is a balanced portfolio of equities, bonds and cash. Take a look at "Total Return". 

An income fund is one that produces a steady and regular set of cash payments over time higher than the market average. This can be contrasted with a growth fund with an objective of increasing capital value over the longer term.

Generally capital value is far more volatile over the short and medium terms than income but may lead to higher long term returns.

Which type of fund is most appropriate depends on your objectives.

Brenchk

Ciprico said:

City of London IT could be worth a look, or a simple ftse100 tracker....

I think the City of London find looks spot on. Thank you.