If you are an income seeker who is looking for high yields, see below for a selection of funds that offer regular income payment options.
James Caldwell, Director
A high yield income fund ISA is a way of using your ISA allowance that aims 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.
Your ISA allowance for 2013/14 is £11,520 per person, and you are permitted to invest all or part of this amount in an investment ISA, or up to £5,760 in a cash ISA and the remainder in stocks and shares.
Transfers are permitted and are straightforward to complete - request our Fund Supermarket brochure pack for more details.
See the table below to compare a range of high yield income fund ISAs available through ISA.co.uk and utilise your 2012/13 ISA allowance.
|Fund Manager||Fund||Fund Manager Initial Charge¹||Your Saving||Saving On ISA²||AMC³||Income Yield*||Select Fund°||Fact Sheet||Apply Now|
|Aberdeen High Yield Bond||0%||4.25%||£453||8.9%||Factsheet||More Info >|
|Income Paid Monthly. Attractive level of income with the opportunity for some long-term capital return by investing in non-investment grade debt and debt related securities issued by companies, governments, government related bodies and supranational institutions domiciled or active in the UK or Europe. See latest fund factsheet for details.|
|High Yield Bond||0%||3.75%||£400||7.4%||Factsheet||More Info >|
|Income Paid Monthly. Principally invests in higher risk UK and international fixed interest securities to achieve a high level of income which is paid on a monthly basis. See latest fund factsheet for details.|
|Standard Life Investments Higher Income||0%||4.00%||£427||6.7%||Factsheet||More Info >|
|Income Paid Quarterly. Fund aims to provide a significantly higher level of income than that available on gilts by investing mainly in Sterling and Euro denominated sub investment grade corporate bonds. See latest fund factsheet for details.|
|High Yield Bond||0%||4.50%||£480||6.3%||Factsheet||More Info >|
|Income Paid Monthly. The primary investment objective is to maximise total return(income plus capital) by investing in a portfolio of predominately high yield bonds, selected investment grade bonds and cash. The fund may hold sterling and other currency denominated bonds hedged back to sterling. The fund may also invest in deposits, money market instruments, derivative instruments and forward transactions. See latest fund factsheet for details.|
|M&G High Yield Corporate Bond||0%||3.00%||£320||5.7%||Factsheet||More Info >|
|Income Paid Monthly.The fund is designed to maximise total return while generating a high income. The fund invests in high yielding bonds with a minimum in sub investment grade issues. See latest fund factsheet for details.|
*Current Income Yields are Gross, Variable and Not Guaranteed as at 25/02/13 - Yields are rounded down to one decimal place - See Fund Factsheet for latest details.
¹The Initial Charge after 100% of the Fair Investment Company Charge has been rebated as well as any fund manager discounts we can pass on to you if applicable.
²Based on 2011/12 ISA allowance of £10,680 when you invest through Fair Investment Company.
³AMC is the Annual Management Charge applied by the Fund Manager. By using our Fund Supermarket we can rebate up to 0.20% of the AMC back to you. This rebate is paid into a cash account which is set up for you when you first invest.
°Select Fund - Has a OBSR A Star Rating or more and a 100% initial charge discount.
High Yield Bonds: These funds invests in riskier bonds, known as sub-investment grade bonds. These bonds pay higher interest rates, to try to provide more attractive income returns. To achieve this, greater risk is taken as the companies are more likely to miss payments or not repay the loan, resulting in the returns on your investment falling.
Important Risk Information:
This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.