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5 most popular income funds for pension drawdown in 2019

We reveal some of the most popular income funds with our drawdown clients in 2019.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Drawdown is one of the most flexible ways to access your pension. You’re in charge of your income and investments. You choose how much income to take, when to take it and where to invest the rest. Choosing where to invest your pension isn’t always easy. The investments you choose will have an impact on how much income you get in retirement, and how long your pension lasts. Your investments and income can fall as well as rise in value and you could get back less than you invest.

So, which income funds are popular with drawdown investors?

We’ve provided below a list of the five most well-liked income funds among our drawdown clients in 2019 (measured by assets under administration as at 31 December 2019). This is for your interest only. This article is not personal advice. If you’re unsure if an investment is suitable for you, please seek advice.

You should think carefully about your own objectives and how much risk you’re comfortable with when deciding where to invest. The funds are ordered alphabetically.

*HL Multi-Manager Funds are managed by our sister company, HL Fund Managers Ltd.

These funds invest in different areas and their managers use different investment styles. They could each provide a starting point to help you build an income producing portfolio, but there are no guarantees, and we suggest holding a mix of funds to keep a portfolio well-diversified. We take a look at two of the funds in more detail.

BNY Mellon Global Income

UK companies have always been good at balancing the need to invest for growth and paying attractive dividends to investors. But there's a world of opportunity beyond our shores and an increasing number of companies pay dividends globally.

BNY Mellon Global Income provides exposure to companies worldwide. It also aims to pay a regular income, which is great if you’re using the natural income strategy.

The managers find the most attractive opportunities in developed markets like the US, UK and Europe. But they also have the flexibility to invest in emerging markets, and tend to invest in a small selection of companies, both of which can increase risk.

They run the fund conservatively and invest in large, fairly stable companies. They aim to identify themes set to shape the world, and the companies best placed to benefit.

Currently the fund yields 2.97%, but this isn't a reliable indicator of future income. We think the fund's a good choice to diversify a UK-focused income portfolio. It takes its charges from capital, which can increase the income paid out but reduce the growth potential of your investment over time.

Find out more about the fund, including charges

Marlborough Multi Cap Income

Most UK equity income funds focus on larger businesses, but Marlborough Multi-Cap Income offers something a little different.

The fund mainly invests in small and medium-sized companies. They aren’t often thought to pay high dividends, but many do. They also offer greater growth potential because they’re at an earlier stage of their development. And as they grow into successful businesses, the cash they generate and dividends they pay have the chance to grow too. Being at an earlier stage of their growth path makes them higher risk though and periods of volatility should be expected.

The fund's managed by Siddarth Chand Lall. He’s supported by Marlborough's UK smaller companies team, who we've rated highly for many years.

We like that this fund could help to diversify an income portfolio and think it offers great long-term potential. The fund currently yields 4.33%, but this is not a reliable indicator of how much income it’ll pay in future. It takes its charges from capital, which can increase the income paid out but reduce the growth potential of your investment over time.

Find out more about the fund, including charges

Our guide provides more detail on how your strategy for taking an income can affect where you invest. Plus we offer some investment ideas.

Guide to investing in drawdown

What help is available?

If you have any questions, the experts on our helpdesk are always happy to help. They’re available on 0117 980 9926 six days a week: Monday to Thursday 8am - 7pm, Friday 8am - 6pm and Saturday 9:30am - 12:30pm.

The government provides a free and impartial guidance service to help you understand your retirement options - more on Pension Wise.

This article and the information on our website aren’t personal advice. What you do with your pension is an important decision. We strongly recommend you understand all your options and that the option you choose is right for your circumstances. Take advice or seek guidance if you’re unsure. We offer advice if specifically requested.


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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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