AJ Bell has launched two income funds each targeting an annual yield of 4% and with capped ongoing charges of 1%.
The AJ Bell Income fund will invest largely in global government and corporate bonds, while the AJ Bell Income & Growth fund will invest in real assets, including equities.
The latter fund aims for capital growth in line with inflation, while the former fund simply aims to maintain capital value.
The offer period on the fund ends on 8 April in order to let investors allocate either from this year’s or next year’s Isa allowance. The funds can also be accessed via Sipps and dealing accounts.
AJ Bell chief investment officer Kevin Doran (pictured) said: “Income generation is a goal for a huge proportion of investors, particularly with interest rates remaining perpetually low and pension freedoms placing the onus on people to generate an income from their investments.”
The annual management charge on the funds will be 0.15% while the OCF will be capped at 1%. AJ Bell has also pledged to pass on economies of scale as assets within the funds grow.
AJ Bell Income asset allocation
| International bonds | 42% |
| UK Government bonds | 15% |
| UK Equity | 15% |
| UK Corporate bonds | 10% |
| Europe ex-UK equity | 5% |
| Pacific ex-Japan equity | 4% |
| Emerging markets equity | 4% |
| Infrastructure | 3% |
| Cash (and equivalents) | 2% |
AJ Bell Income and Growth asset allocation
| UK Equity | 30% |
| Property | 20% |
| Pacific ex-Japan Equity | 13% |
| Technology equity | 10% |
| North America Equity | 7% |
| Emerging Markets equity | 7% |
| Europe ex-UK equity | 6% |
| Infrastructure | 5% |
| Cash (and equivalent) | 2% |
