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Launching our new income fund – British Enhanced Income

We’ve built the British Enhanced Income fund especially for those looking for income from high-quality, home-grown investments. It’s a fund made up of our top investment ideas and is a really simple way to invest, as instead of buying a range of funds and managing them yourself, you just pick the British Enhanced Income fund and we do the rest.

Tom White
09 March 2016

The fund aims for a yield of 4%, although this isn’t guaranteed and income yields may be higher or lower than the target. It focuses on British investments, which have a reputation as some of the highest-yielding. UK companies pay the reliable, healthy dividends that income investors rely on – the UK is home to world-beating businesses, with business models that are truly global in breadth. For instance, Diageo sells its drinks to customers in more than 180 countries. Such a wide consumer base provides diversification.

A target 80% of the portfolio will be invested in the UK. Just over half of the fund is invested in equities. You’ll also find bonds and, to a lesser extent, other investments such as property and hedge funds for diversity. This fund is for investors comfortable with moderate risk and remember that the income produced and the value of the investment can go down as well as up. Below, we detail some equity, bond and property funds that British Enhanced Income invests in.

When you’re ready to invest, you can do so quickly and easily here. If you have any questions about the fund or your investments in general please call 020 7189 2400, request a call back or email us at best@bestinvest.co.uk.

UK Equities

Threadneedle UK Equity Income – a five-star, highly rated fund

Manager Richard Colwell enjoys football in his spare time. Much as how a football team’s ‘4-4-2’ formation is designed to balance the whole width of the playing field, Colwell takes a balanced approach to investing. This is opposed to other UK income funds, which can be more aggressively or defensively positioned.

Colwell prefers companies with ‘solid’ management – in his fund’s portfolio are pharmaceutical giants AstraZeneca and GlaxoSmithKline and British supermarket Morrisons.

Woodford Equity Income – the headline hitter

Neil Woodford is a veteran of the UK fund management scene and has a strong track record dating back to 1988. Such is Woodford’s stature that his comments on topics such as Brexit receive widespread attention in the UK press. His defensive investment style is sometimes out of favour, however, we expect it to serve him well over the long term.

His style means he leans towards more predictable industries, such as healthcare, but he recently took a position in Purplebricks, the online estate agency that promises to shake up that market.

JO Hambro CM UK Opportunities – a tough selection process

Manager John Wood has rigorous selection criteria. His focus on ‘quality’ companies leads to a portfolio that typically contains just 25-40 stocks – only his strongest investment ideas, from a pool of 60-70 that meet his criteria, make it in. He primarily invests in FTSE 100 and FTSE 250 companies, searching for those that are well-managed and have strong balance sheets with predictable cash flows.

The companies that fit Wood’s bill? Well-known names such as Capita, Unilever and Travis Perkins.

Bonds

TwentyFour Corporate Bond – a new fund

TwentyFour launched this new fund in January 2015, with manager Chris Bowie at the helm – Bowie successfully led Ignis’s corporate bond fund between 2009-2014. He primarily invests in investment grade bonds, but he also has a mandate to invest up to 20% in high yield or floating rate bonds.

Fidelity Extra Income – an experienced, high-profile manager

Ian Spreadbury and Sajiv Vaid co-manage this fund – Spreadbury is high-profile and recently celebrated 20 years of managing his other income fund, Fidelity MoneyBuilder Income. Vaid joined him on this fund in 2015 from Royal London Asset Management. They aim to achieve a high level of income by building a hybrid portfolio investing in high yield and investment grade bonds.

Property

UK Commercial Property Trust – access to UK properties

This trust is managed by Standard Life’s real estate team. It invests in properties such as the Rotunda centre in Kingston upon Thames, which houses a 14-screen IMAX cinema, and the Ocado distribution centre in Hatfield.

 

How to invest in the British Enhanced Income fund

When you’re ready to invest, you can do so quickly and easily here.

 

Investments in the British Enhanced Income portfolio can change. These holdings are correct as at 09 March 2016. The fund’s full name is IFSL Tilney Bestinvest British Enhanced Income.

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Past performance is not a guide to future performance. Funds may carry different levels of risk depending on the industry sector(s) in which they invest. You should ensure that you understand the nature of any fund before you invest in it. Bonds issued by major governments and companies will be more stable than those issued by emerging markets or smaller corporate issuers; in the event of an issuer experiencing financial difficulty, there may be a risk to some or all of the capital invested. Please note that historical or current yields should not be considered reliable indicators of future performance. The property market can be illiquid; consequently, there can be times when investors will be unable to sell their holdings. Property valuations are subjective and a matter of judgement. The British Enhanced Income fund is administered by Investment Fund Services Limited (IFSL), a subsidiary of Marlborough, one of Europe’s leading financial groups, who also act as the Authorised Corporate Director (or “ACD”) of the Open Ended Investment Company.