What you need to know about income funds

David Scobie, a senior consultant at Mercer, questions what part income funds should play in investor portfolios on the GoodReturns website

We think David Scobie presents very sensible observations on income funds in general and his article outlines key considerations for investors.

"In recent years we have seen a flurry of “income” type funds enter the market.  These can take various forms but a common theme is an emphasis on yield-rich assets and an almost complete avoidance of lower yielding assets such as sovereign bonds. 

Such funds come with their own risks - the narrow pursuit of income in today’s low yield environment can offer as much downside to the unwary as the narrow pursuit of capital growth... " To read the full article click here >> http://www.goodreturns.co.nz/article/976503559/what-you-need-to-know-about-income-funds.html

There may be a place for an income fund as part of a balanced porfolio, but be sure you understand what you are investing in and what the potential risks are as well as the likely gains.