Income funds can make solid choices for a range of investors, from those in retirement needing to supplement their pensions with dividends to younger people who can reinvest the generated cash into buying more units.
Investors can approach this by either picking equity income funds, which have been particularly strong over the past five years, or through bond portfolios.
Below, experts share the income funds that investors looking to use their remaining stocks and shares ISA allowance before the April deadline could consider.
Global equity income
Two went for global equity income funds, which invest in dividend-paying companies from across the world.
Scott Heaney, investment research analyst at Titan Square Mile, suggested the M&G Global Dividend fund, managed by Stuart Rhodes, who “applies a thoughtfully constructed investment process and believes that a commitment to growing dividends exerts discipline on a company’s management”.
“Moreover, those that successfully deliver consistent payouts to shareholders should attract a premium market valuation,” Heaney added.
M&G Global Dividend has been a top-quartile performer in the IA Global Equity Income peer group over three, five and 10 years, making 217.5% over the past decade.
Performance of fund vs sector and benchmark over 10yrs
Source: FE Analytics
Rhodes blends a core of reliable dividend-paying companies with more cyclically sensitive names and those with growth momentum, meaning the overall portfolio “remains competitive across a range of market conditions”, said Heaney.
“Although the fund invests in income-producing companies, the manager has a preference for dividend reliability and won’t overstretch for yield. He is also sensitive to valuations and will not overpay in the pursuit of dividend sustainability,” he added.
Simon Woodacre, fund research analyst at Quilter Cheviot, chose a different fund from the peer group: TM Redwheel Global Equity Income.
Run by Nick Clay since its launch in 2020, the fund has a low turnover approach coupled with a “reasonably long investment timeframe”.
“Historically, the fund has been able to steadily compound returns with lower levels of volatility and good levels of downside market protection, which makes it ideal for investors who don’t want to be concerned about drawdowns and volatility,” said Woodacre.
However, returns have underwhelmed in recent years as markets have risen strongly. TM Redwheel Global Equity Income sits in the third quartile of the peer group since its launch, although it has flourished in more recent times as war in the Middle East has heightened volatility. So far in 2026 the fund is up 3.6% while the sector average stands at 0.6%.
Performance of fund vs sector since launch
Source: FE Analytics
“It is a good defensive option, especially when used in conjunction with some higher-risk options,” said Woodacre, who added that its 3% yield can be reinvested by those who do not need the income immediately.
UK equity income
Other selectors went for funds with a specific geographical remit. Paul Angell, head of investment research at AJ Bell, stayed close to home with Man Income, a UK equity income fund run by FE fundinfo Alpha Managers Henry Dixon and Jack Barrat.
They invest in undervalued UK companies across the market capitalisation spectrum that pay a yield at least in line with the market. This can risk investing in value traps – those companies that look cheap but for good reason – so to avoid these they also look at cashflow and assets.
“The team seek out undervalued and unloved companies, of which the UK market continues to present opportunities. Their investment process centres on identifying two types of stocks: those trading below their replacement cost (i.e. what it would cost today to replace a company’s assets and operations) that are also cash generative and those where the market appears to be undervaluing profit streams,” he said.
It has been the second-best fund in the IA UK Equity Income sector over the past decade and has made top-10 returns over three and five years as well.
Performance of fund vs sector over 10yrs
Source: FE Analytics
Man Income has been in the top-quartile of the peer group in each of the past four calendar years and started 2026 strongly, although it has returned most of the gains made in the first two months of the year since the Iran war started at the end of February.
Last year was a standout for the fund, which made 27% thanks in large part to banks, with Lloyds, Barclays and Standard Chartered all contributing.
“The fund remains cheaper than the market on an 11.3x price-to-earnings ratio, with a distribution yield of 4.4%,” Angell noted.
Asian equity income
Looking further afield, Chris Metcalfe, managing director and chief investment officer at IBOSS, selected BNY Mellon Asian Income, a top-quartile performer in the IA Asia Pacific Excluding Japan sector over the past one, three and five years.
It is also ahead of both its peer group and the benchmark over 10 years, although returns are in the second quartile during this time.
Performance of fund vs sector over 10yrs
Source: FE Analytics
Asia is an area that is often overlooked for dividends and diversification, he said, but Zoe Kan’s Asia fund stands out. She has managed the portfolio since 2015, although has worked on the fund since 2010, he noted.
“The fund has a yield discipline which curbs some of the exuberance of other funds in the sector,” said Metcalfe, while its track record of risk-adjusted returns and lower drawdowns means it “exhibits just the characteristics an income investor might prefer”.
Indeed, while BNY Asian Income has struggled during the best years for the sector, such as 2017 and 2020, it has stood out during more difficult periods, such as between 2021 and 2023.
Bonds
Equities are the most adventurous way to get an income but Angell also highlighted Aegon High Yield as an alternative solution.
This fixed income fund invests in global high yield bonds and pays out a significantly higher yield of around 8.3%. It also carries less interest rate risk as yield bonds are typically shorter maturity than their investment-grade counterparts, he said.
“The managers of this fund, Thomas Hanson and Mark Benbow, are entirely index agnostic in their management of the strategy, believing a passive allocation to high yield bonds is nonsensical given indices are weighted to the most indebted businesses,” said Angell.
Individual bond selection is paired with a macroeconomic view. The managers assess the fundamentals, valuation, technicals and sentiment of the market
The co-managers have been on the fund together since November 2019. Benbow was named co-manager in 2018, with Hanson joining around a year later.
During their time together, they have “successfully navigated both up and down markets, including the Covid pandemic and rising interest rates, delivering top-quartile returns within their peer group,” Angell said.
Performance of fund vs sector and benchmark since manager start
Source: FE Analytics