Compare High Yield Income Fund ISAs

Select the best high yield income fund ISA to make the most of this year’s tax free allowance.

Investment ISAs put your capital at risk & you may get back less than you originally invested

Moneybuilder Income

from Fidelity

Regular Savings
Allows ISA Transfers
  • Fund Choice: Popular corporate bond fund that pays a monthly income. Manager Sajid Vaid believes investment grade (high quality) company bonds may be the ‘sweet spot’ in the fixed income market, delivering modest income while keeping risks in check. Capital at risk.
  • Invest From: £25 pm

Why we like it: A fund with a conservative approach to bond investing. The focus is on quality companies that are in good financial health and generate enough cash to keep paying bondholders. Aims to provide a relatively steady income and a small amount of growth, without taking excessive risks. It could help diversify a portfolio focused on shares, or be used as a way to limit volatility during tougher times for stock and bond markets.

Monthly Distribution

from Artemis

Regular Savings
Allows ISA Transfers
  • Fund Choice: High income yield fund suitable for long term investors drawing regular monthly income from their portfolios. Capital at risk.
  • Invest From: £25 pm

Why we like it: If you are looking for a high income yield this fund is suitable for long term investors drawing regular income from their portfolios. With a focus on high yield bonds and shares, the fund manager is an experienced bond investor who has a flexible approach to seeking out the best income opportunities.

Multi Manager High Income

from Hargreaves Lansdown

Regular Savings
Allows ISA Transfers
  • Fund Choice: HL blend their favourite equity income funds to provide investors an investment which aims to deliver long term returns & reliable monthly income. Capital at risk.
  • Invest From: From £25

Why we like it: The Hargreaves Multi Manager High Income fund aims to deliver a high monthly income to clients by blending different types of funds and moving between different areas of the market when more attractive opportunities emerge. HL also aim to grow this income payment over time and therefore may invest in higher risk smaller companies they believe offer great potential for long term capital growth.

Listed Equity Income

from AVIVA Investors

Regular Savings
Allows ISA Transfers
  • Fund Choice: Aims to provide a dividend yield above the FTSE All-Share Index. Invests in UK equities judged to offer high yield, above average prospects of dividend growth and long-term capital growth. Income paid twice yearly. Capital at risk.
  • Invest From: £25 pm

Why we like it: Getting paid a regular income is a priority for many investors. Whether you’re in retirement, or want to boost your existing income, an equity income fund could be right for you. Even if you do not need income now, you can opt to reinvest it to boost capital growth. An emphasis on dividends and dividend growth makes this fund a more traditional UK equity income fund, in our view, so it could help form the foundation of an income portfolio.

Property Income

from Pitcon

Regular Savings
Allows ISA Transfers
  • Fund Choice: This Real Estate Investment Trust which invests in UK commercial property pays investors a quarterly dividend. Capital at risk.
  • Invest From: £25 pm

UK Ethical Income

from Unicorn

Regular Savings
Allows ISA Transfers
  • Fund Choice: Actively managed fund that aims to provide an income by investing in UK companies which meets ethical guidelines. Capital at risk.
  • Invest From: £25 pm

The fund will invest in ethical companies based on thorough company analysis, with ethical and socially responsible criteria reviewed at the point of investment and quarterly thereafter. The Fund invests at least 80% in UK quoted companies with a bias towards small and medium sized companies (those with a market value of less than £4 billion).

What is a High Yield Income Fund ISA?

A high yield income fund ISA is a way of using your ISA allowance with an aim to provide you with a high yield tax-efficient income payment on your investment or savings. Income may be paid on a quarterly, semi-annual or annual basis, so you can choose an option to suit your savings goals.

High yield income fund ISAs offer the potential for higher income than from cash savings although you do need to be comfortable with the associated investment risk. To obtain the higher yield, fund managers will typically invest in lower grade bonds provided by companies where there is a higher risk of default.

You are permitted to invest all or part of your annual tax-free amount in to an investment ISA or in to a cash ISA. Alternately, you can divide your allowance between the two types of ISA as you wish

What Can a High Yield Income Fund Offer?

Investing in a high yield income fund ISA can offer:

Regular income – Many funds offer either monthly or quarterly income options. If you invest in an ISA, income can be distributed to you tax free. If you prefer, some funds allow you to accumulate the income within the fund by buying more units, in order to provide capital growth.

Diversification – a typical corporate bond fund will invest in at least 40 different institutions or more, reducing the risk to investors in the event of default by a bond issuer.

Potential for capital growth – this type of fund can provide capital growth at a lower level of risk than equity investment.

Fund manager expertise – Our Select Fund range of bond funds for income have been assessed by independent research company Morningstar OBSR and all feature at least a Gold or Silver rating.

Why Invest Through our Fund Supermarket?

There are several reasons why our Fund Supermarket might be right for you:

1.Low charges – Many of the funds available to you can be accessed at no initial charge. What’s more, many annual management charges offer a discount of up to 0.20% per year.

2.Great choice of funds – Over 1500 funds to choose from including leading UK income fund managers such as Invesco Perpetual, Jupiter and Fidelity.

3.Manage your funds online – Our Fund Supermarket service provides you with online access so you can monitor your investment funds 24/7, wherever you are.

4.Customer Services Team – We are here to help you if you have any queries.

Can I Transfer Existing High Yield Income Fund ISAs into your Fund Supermarket?

Transfers are permitted and are straightforward to complete. Contact a member of staff for more details.

Frequently Asked Questions

Can I transfer my Cash ISA into a Stocks and Shares ISA?

Yes, you can transfer from your Cash ISA to a Stocks and Shares ISA at any time. However, do check you won’t lose out by transferring, as some Fixed Rate Cash ISAs may charge a fee or void your interest if you surrender your policy before the fixed term has ended

Do I pay tax on a monthly income ISA?

No, all payments from an Income ISA is completely free from tax.