Mel and I have come to the realisation that whilst our ISA platform (iWeb) is quite cheap and convenient to use, it also does not offer us a great deal of choice of UK retail bonds for us to purchase. So we've decided that rather than swapping platform provider, we should, for now, increase our bond allocation by making purchases into "bond funds". I wondered if anyone could give us a low-down on what choices we will probably have.
For instance, we have some units of "Fidelity World Equity Index tracker", and we chose the "reinvest dividends" version of the fund, instead of the "income" version. I had a quick look at one or two bonds available to us, from iWeb, hmm...
BlackRock Corporate Bond D Acc (Accumulation)
Price as at 24 September 2018
ISIN: GB00B4QC3311
BlackRock Corporate Bond D Inc (Income)
Price as at 24 September 2018
ISIN: GB00B4T5JV79
yes, I see that's pretty clear, similar choices with bond as well as equity funds, i.e. Acc or Inc.
Ok, so when I drilled down into the BlackRock Corporate Bond D Acc (Accumulation) for it's details, I see that return/yield is being described twice:
5 year annualised return 12 month yield
6.01% 3.03%
So what does the above mean? 3% annual yield seems reasonable, if the fund is reinvesting the coupons. But what is the 6.01% 5 year annualised return detail all about? (Is it typically the average yield taken over the past 5 years?)
And finally, can anyone make us a recommendation for a high-yield (we appreciate the risk angle, but if the risk is diversified that seems less worrying to us) bond fund? i.e. as low management charge/fees as possible, and high yielding bonds across sectors and locations? I'm asking this since in addition to recommendations generally being nice, I'm finding iWeb's bond fund search/filtering web pages, somewhat painful to use!
many thanks
Matt and Mel