Six high-yielding funds for income investors to buy now

Rising interest rates are starting to make many popular income funds look less than attractive. Here, David Stevenson picks six that should weather the storm.

Container ship at sea
Tufton Oceanic: a solid yield from ships
(Image credit: © Alamy)

Income investors are in a quandary: rising interest rates make many conventional bonds a difficult sell. Why invest in an asset class that will clearly fall in value as rates rise? And that’s ignoring the fact that real yields are already in deeply negative territory .

Rising interest rates also put pressure on investments further up the yield ladder. If UK ten-year government gilts now yield over 2% and US Treasuries over 3%, why invest in a riskier asset if the yield is just 4%-4.5%? The direction of travel for bonds is now obvious and I wouldn’t be surprised if the headline ten-year rate might shoot past 3.5%-4% in the UK and 5% in the US before the current rates cycle peaks.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.