3 Funds for Growth Plus Income

These three funds deliver capital appreciation while also managing to generate income, offering investors a decent total return on their investment

Holly Cook 1 September, 2015 | 9:12AM
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Here at Morningstar we think it’s important to look at total return. So that’s not just the capital appreciation that you may get with an investment but also any income you’re generating, and have a look at the overall picture to get a real understanding of what you’re getting from your investment.

So I’ve chosen three funds today that not only provide capital growth but also provide a pretty decent yield, providing income to investors. All three of these have achieved average returns over the last three years of between 12% and 15% per year, so that’s your capital growth portion; as well as paying a 12-month yield at the moment of around 4% each, giving you the income portion.

The first one to look at is Artemis Income. This has a Gold rating from Morningstar analysts and a three-star performance rating. This is really one that we think is an outstanding choice for UK equity income-seekers, and it charges an ongoing charge of 1.54%.

The second is an investment trust, so that’s traded on the London Stock Exchange, and it’s called the City of London (CTY). It’s got strong management, a consistent process and low fees that have really all contributed towards excellent long-term performance. This one has an ongoing charge of 0.44%.

Last but not least I’ve looked at an exchange-traded fund, so that’s also traded on the London Stock Exchange, and this one’s called iShares UK Dividend UCITS ETF (IUKD). It has three stars from Morningstar and it gives you exposure to the 50 highest-yielding UK stocks, although it’s important to note that because of the make-up of the FTSE it is quite heavily weighted towards financial stocks. This one has an ongoing charge of 0.4%.

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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Artemis Income R Inc2.32 GBP-0.42Rating
City of London Ord404.00 GBX0.25Rating
iShares UK Dividend ETF GBP Dist701.70 GBX0.31Rating

About Author

Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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