Income or Growth?

Income or Growth

Investing for Income

With an Income fund, a fund manager will be concerned about the level of dividends that a particular company pays. Therefore when building a portfolio, the fund manager will invest in companies that currently pay decent levels of dividend payments with the potential profitability for future returns. These funds can also, if performing well, provide a healthy level of capital growth in addition to the income that is being paid. Equity funds tend to pay out up to around 4% with bond funds up to and around the 6% to 7% mark. Bond funds are generally lower risk so may not provide as much growth if equities are performing well. Similarly, a bond fund may not suffer as much as an equity fund if both bond and equity markets were performing relatively badly. Investing in an income fund doesn’t mean that you have to receive the income payable so therefore always invest into the fund that suits your requirements and risk attitude. You can always reinvest the income for now or the life of the investment or take it at a later date.

Investing for Growth

The focus for the fund manager of a growth fund will be somewhat different from the manager of an income fund. When investing for purely for growth, medium or smaller companies may be targeted especially those that may reinvest their dividends back into their businesses rather than paying shareholders. Therefore, growth funds generally tend to have a slightly higher element of risk than income funds. This does not mean that they are all small to mid cap companies, many have high quality blue chip stocks less likely to have financial difficulties. There is a wide range of funds suitable for the majority of investors. We can help you choose the type of fund which best suits your needs.

Monthly Savers

Saving monthly can be a great way to spread your risk, especially if you are unsure about market conditions. When buying this way, it doesn’t matter if the price of the fund is supressed as you are essentially buying more units at a lower price. When the price does move in the right direction you’ll have more units giving you a higher value.

Performance, charges, fund choices

Current ISA rules

Current ISA rules

Do you know the current rules governing ISAs?

ISA rules

Direct or Platform

Direct or platform?

The difference between investing direct or through a fund supermarket (platform)

Direct or platform?

Junior ISAs Explained

Junior ISAs explained

What is a junior ISA and who can invest in them

Junior ISAs

Investment Types

Investment types

Find out what types of investments are available

Investment types

Which fund is right for me?

Which fund is right for me?

Unsure what fund to invest in? We may be able to help you decide

Fund choice