By ANGHARAD CARRICK FOR THIS IS MONEY, 21 October 2022:
After years of rock-bottom rates, saving has become tempting again as banks hike their rates to the highest levels seen in more than a decade…
With more than 4 per cent interest on offer from the best one year fixed rate savings accounts, savers may well look at those rates and consider parking their cash there.
But there is another option for those looking to grow their wealth, that traditionally investors have measured a solid interest-paying savings account against: equity Income funds aim to generate dividend income and increase the value of your original investment…
Is cash still king?
There has been a flight from equities since the start of the year amid market turbulence off the back of higher interest rates and in the UK, the fallout from the mini-Budget…
It is understandable why some low-risk investors are sticking with cash, particularly those who need their money in the next year or two. But is it really the best way to grow your wealth?..
McDemott adds: ‘When you invest in a share, you get something that you can’t get when you put money into a bank account, and that’s the potential of capital growth…
UK Equity Income is a good starting point for investors looking to grow their portfolio given it has long been the leading market for dividends. UK Equity Income funds have performed largely in line with the FTSE over 10 years.
Our experts pick their top income funds
Within UK Equity Income there are five funds that offer a yield of around seven per cent.
Matthew Read, senior analyst at QuotedData says: ‘Of these 7+ per cent yielders, we think that some are best avoided as high yield can be a sign of distress, but two good options are Henderson High Income and abrdn Equity Income.’
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