AJ Bell has launched two income funds for advisers targeting clients looking to take a tax-free sum from their Isa or use income drawdown via a pension.
The funds both target an annual yield of 4 per cent and have the same charging structure as AJ Bell’s other funds.
This includes ongoing charges capped at 1 per cent.
The lower-risk income fund will invest primarily in government and corporate bonds globally and look to maintain capital value from the initial investment.
AJ Bell chief investment officer Kevin Doran says: “Income generation is a goal for a huge proportion of investors, particularly with interest rates remaining perpetually low and pensions freedoms placing onus on people to generate an income from investments.”
The more aggressive Income & Growth fund will look to grow in line with inflation, currently 1.8 per cent.
Investments will be in real assets including equities and property.
The fund has no exposure to bonds, despite its categorisation as a multi-asset income fund.
Doran says: “These funds give advisers two different options whilst aiming to either maintain their capital or grow it.”
The offer period for new funds opens today with the funds set to go live on 8 April. Investors are therefore able to use their 2018/19 or 2019/20 Isa allowance to invest.