By continuing to use this site you consent to the use of cookies on your device. Find out more about our cookie policy and the types of cookies we use by clicking here

Your Guide to Finding Investment Income

SPECIAL REPORT: In our annual guide to investing for income, Morningstar rounds up the great and the good to offer their tips on where to find yield

Emma Wall 13 February, 2017 | 9:27AM

Income investors looked hopeful this time last year. In our annual guide to investing for income, the outlook last February was positive. The Federal Reserve had raised interest rates in December – the first time in seven year, and was promising several more rate hikes through 2016, and the Bank of England looked set to follow.

But then the unexpected happened and Britain voted to leave the European Union, sending the pound plunging and the Bank into damage limitation mode. As a result, instead of Mark Carney delivering longed-for rate rises to UK savers and investors, the Bank of England base rate was cut to and even lower record level of 0.25%. The best selling easy access savings account is now offering just 1.1% – while the 10 year gilt yield is down to 1.29%.

Low rates are just about palatable in a world of stagflation, but thanks to rising oil prices Britain’s prices are rising – just look at the recent announcements from energy providers ready to increase customer tariffs. The most recent Consumer Price Index, the official measure of inflation in the UK sits at 1.6% for December – and this week we expect to hear January’s measure is even higher.

All hope is not lost however. If you can bear to look up the risk scale to equities, the FTSE 100 yields an average of around 3.7%, despite rallying 15% in the last year. The FTSE 250 offers a more diverse and less expensive group of stocks yielding an average of 2.7%. And those are just domestic offerings – the US, Europe and even emerging markets have well-covered dividends and investment grade bonds for the discerning income investor.

All this week we bring you the best income opportunities across the globe, as picked by top fund managers, professional investors and our own stock and fund analysts. Happy yield-hunting.

Monday: Why We Should All be Income Investors

The power of compound interest, what is yield and cash options

Why You Should Consider Income Investing

Jupiter: Inflation Will Rise to 3%

Challenger Banks Push Up Cash Savings Rates

What is a Stock?

What is a Bond?

Tuesday: Top Income Stock Picks

The stocks with the highest dividend yield around

Top 20 FTSE 100 Dividend Paying Stocks

Top 20 FTSE 350 Dividend Paying Stocks

3 Value Stocks with a Dividend Yield

3 US Income Stocks with a Sustainable Yield

5 FTSE Stocks Who Have Dropped Their Dividend

Wednesday: Developed Market Income Funds

Equity and bond funds invested in developed markets

What Does Rising Inflation Mean for Bond Investors?

Invesco: Opt for Equities to Beat Inflation

3 Gold Rated Fixed Income Funds

Which is the Best UK Equity Income Fund?

Don't Pay for a Manager Who Hugs the Index

Thursday: Emerging Market Income Funds

Equity and bond funds invested in emerging markets

3 Top Emerging Market Bond Funds

Top Yielding Emerging Markets Investment Trust

Top 5 Emerging Market Income Funds

Bond Investors Have Nowhere to Hide from Political Risk

Friday: Income Investing and Retirement

How to use income-paying investments in your pension portfolio

Could You Live on £25 a Week?

Debt in Retirement Rises 30%

Savers Worried as Only 3% of Accounts Beat Inflation

Not All Baby Boomers Hit the Financial Jackpot

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author Emma Wall

Emma Wall  is Senior Editor for Morningstar.co.uk