Interactive Investor 'basket' of ITs for income

[mc2fool]

I thought there would be an index fund which paid out the yield as a dividend. Are you saying there are non which do that and that you must slice off the equivalent yield as you need it?

I've never looked into index or trackers for this purpose before, so excuse my ignorance.

Ummm....well (without actually counting) I'd say that most index trackers pay out the yield as a dividend. For example, and perhaps most mundanely, iShares FTSE 100 ETF, ISF, does and is currently yielding 4.15% (trailing 12 month), and I'm a little surprised at your last comment 'cos, unless my memory fails me, I thought you'd invested (in the past at least) in some of the custom index trackers, like IUKD and the aristocrats, IIRC.

The more challenging aspect of your request is the 'will outperform the "usual suspects"' , although you don't define what you mean by "outperform" (capital, yield, income, TR?) or "usual suspects"...

[kempiejon]

For income paying index hugging ETFs as well as ishares there's Vanguard. Their ftse100 VUKE pays the dividend out as does its 250 equivalent VMID, and the Global tracket VWRL, I know there are plenty more covering other geographic areas.

[Arborbridge]

Toofast2lives comment about "you take a capital sum instead of the “natural yield”" in response to my question, perhaps sent me down a false alleyway as I thought he meant index and trackers don't pay out. OK, so some do pay out - though I spent a while on the Vanguard site without finding anything about paying out income.

As regards mc2fool's comment, yes I had UKDV but ignored it as it's not a FTSE or main index tracker. It's a niche player and runs to a theory about a subset of shares - not what I am looking for in this instance. It also employed some jiggery-pockery in the payments meaning that the amount they paid out was unsatisfactory for me - one reason I gave it up.

Anyhow, I feel a bit liike a newbie coming in to any subject - there's a plethora of funds and companies to choose from and I feel a bit clueless about were to start looking.

I pulled up a chart for one fund - Royal London FTSE350 tracker - and see that is comes in lower for TR than most of the UK ITs I have already, including CTY for example, over 5 and 10 years. So, not a good start for the passive lobby - but no doubt people can point me to their favourites.

I also added the index line for FTSE all share and FTSE 350 - "with reinvestment" and neither comes up above the active UK ITs.

Arb.

[Arborbridge]

For income paying index hugging ETFs as well as ishares there's Vanguard. Their ftse100 VUKE pays the dividend out as does its 250 equivalent VMID, and the Global tracket VWRL, I know there are plenty more covering other geographic areas.

Thanks, I've just found and plotted the Vanguard All share one, and it still comes in at lower (only just) than CTY or several other similar ITs. It doesn't have a 10 year record, but it is similar to the Royal London one over 5years, so probably over ten would still be under CTY.

Arb.

*still could be useful for my daughter as a long term investment.

[OhNoNotimAgain]

https://www.hl.co.uk/funds/index-tracke ... cker-funds

HL keeps moving this table around but it is quite helpful.

[Tymeric]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

[DavidM13]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

Hoping for early next week.

[OhNoNotimAgain]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

Hoping for early next week.

Obviously all plugs are equal but some seem to be more equal than others...

[Tymeric]

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

Hoping for early next week.

Obviously all plugs are equal but some seem to be more equal than others...

Do I really have to say I have no connection...FFS....

[DavidM13]

Not sure I understand the above two posts but if I have offended anyone then I apologise!!

[Tymeric]

Not sure I understand the above two posts but if I have offended anyone then I apologise!!

It's ok..it's not you...just someone being anal about it.....thanks for the quick reply by the way

[Peter1B1]

I realise that I am joining this thread rather late but need to shortly refocus a family portfolio to income for care costs. All of the above is therefore very helpful.

My particular requirement is to capture income via Capital Gains so am looking for ITs/UTs etc that operate accumulation options, which I capture as capital growth and then sell as required. I appreciate the tradeoff between risk and higher income: a net yield say 3-4%pa should be acceptable on a quality diversified portfolio.

I will welcome proposals for consideration which can meet this investment profile.

Thank you, Peter1B1

[Alaric]

My particular requirement is to capture income via Capital Gains so am looking for ITs/UTs etc that operate accumulation options, which I capture as capital growth and then sell as required.

Any particular reason why you want to operate this way? There's no taxation difference in holding the same fund as Income units against holding it as Accumulation units.

As far as I am aware, all OEICs would offer accumulation units, sometimes the only option, whilst ITs always distribute except in the limited circumstances where their charges exceed their distributable income.

[Peter1B1]

Alaric, unused CGT allowance and higher rate income tax. Thanks for the general comment. Runners and riders suggestions welcome.

[nmdhqbc]

Alaric, unused CGT allowance and higher rate income tax. Thanks for the general comment. Runners and riders suggestions welcome.

Accumulation units do not acheive this. You still pay tax on dividends and they do not contribute to any capital gain on your tax return. You'd need to choose investments that target capital growth regardless of whether it's inc or acc units of a fund. Inc units make tax returns less complicated so I'd go for them. Take the small dividend such a fund may pay then sell a bit of it also each year.

A couple of usual suspects - SMT (Scottish Mortgage Investment Trust), Fundsmith Equity Fund.

[DavidM13]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

Live now Take a look and if not clear or you have feedback then do feel free to send me a direct message on here or a general one through the website. Hope it is helpful.

[Itsallaguess]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????

Live now - take a look and if not clear or you have feedback then do feel free to send me a direct message on here or a general one through the website. Hope it is helpful.

Thanks for the update David, and for anyone interested, here's a direct link to the new AIC Income-Builder tool -

https://www.theaic.co.uk/income-finder/sign-in

I do want to be clear that I'm posting the above link in the spirit of appreciation to the AIC in general, given that we're often posting about the information gleaned from their website on this forum, so I think it's absolutely fair that we do our bit in return when we get an opportunity to do so...

It looks like a very useful tool David, so thanks for bringing it to our attention.

Cheers,

Itsallaguess

[Darka]

Also been looking forward to this, thanks David.

[dlp6666]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

Live now Take a look and if not clear or you have feedback then do feel free to send me a direct message on here or a general one through the website. Hope it is helpful.

Jolly useful tool this, thanks.

Would it be possible, please, to have some sort of total portfolio value showing, together with an automated calculation of the annual % yield achieved on the overall 'blended' portfolio (though suppose could work that out manually)?

Also - it would be good if the portfolio columns were click-sortable (e.g. by income received, value [which would be a useful additional field], yield etc.).

Thanks

[JuanDB]

If the Lemon Fool doesn't mind I am going to use this opportunity for a shameless plug. Before the end of March we are launching on the AIC website an "Income Builder" tool.

Have been looking forward to this....Any update on the AIC Income builder tool..?????
Cheers

Live now Take a look and if not clear or you have feedback then do feel free to send me a direct message on here or a general one through the website. Hope it is helpful.

David,

This looks like an excellent tool, truly useful.

A couple of suggestions.

1. A y/y comparison would be great to show growth of income over time in a more visual way, perhaps calculate % growth across years.
2. Show history beyond current time window, ideally back 10 years.

Thanks for creating this tool, will be really helpful for visual portfolio modelling.

Thanks,

Juan.