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Popular income funds of 2017 you should know

An income fund is a mutual fund that focuses more on current income than the growth of the money invested. It targets stocks and bonds as investment opportunities because of the high levels of dividend and interest they give. It is an asset allocation fund and may be in the form of bond funds, stock funds or even real estate funds. They are often the destination of target date funds.

Popular income funds of 2017 you should know

As of July 2017, the 10 best income funds based on their performance are: Boost NASDAQ 100 3x Leverage Daily ETP with a performance percentage of 85.14%, VT Morningstar Informed Smartfund Growth Strategy Z Inc with a percentage of 79.49, Boost EURO STOXX 50 3x Leverage Daily ETP with a 70.16% of performance, Neptune European Opportunities B Inc GBP with a 58.59 percentage of performance, Neptune European Opportunities B Accumulation GBP with a 58.58% of performance, VT Morningstar Informed Smartfund Cautious Strategy Z Inc with a 53.96% of performance, Aptus Global Financials B Inc GBP with a 52.99% of performance, Aptus Global Financials B Accumulation GBP with a 52.99% of performance, VT Morningstar Informed Smartfund Balanced Strategy Z Inc with a 51.04% of performance and Baillie Gifford Greater China B Accumulation with a 47.38% of performance.

TheStreet, an American finance news and service website has its methodology to arrive at the 10 best income funds. These funds include VictoryShares US Discovery Enh Vol (CSF), PowerShares S&P 500 Hi Dividend Low Vol (SPHD), WisdomTree Fundamental US HY Corp Bond (WFHY), UBS AG FI Enhanced Global HY ETN (FIHD), First Trust Pref Sec and Inc (FPE), Guggenheim BulletShares 2023 Hi Yield Co Bond (BSJN), First Trust Managed Municipal (FMB), PowerShares Natl AMT-Free Muni Bond (PZA), WisdomTree Fundamental US Short Term High Yield CB (SFHY), and PowerShares Preferred Port (PGX).

As much as it is understood that income funds are more about current incomes than growth, investors don’t necessarily have to sacrifice the capital growth for steady income. Some of the 10 best income funds in this regard are The New Economy Fund which, launched in 2015, has $15 billion in assets and targets long-term capital growth. Almost half the assets in this portfolio are invested in foreign equities of which the three main are Netflix, Alexion Pharmaceuticals, and Hologic; AMCAP fund is one of the 10 best income funds in the country and has an annual return of 11.6% since 1967 which was when it was launched. It has $45 billion in assets which are invested primarily in stocks. They are priced attractively and have a good growth potential. The goal here is to appreciate the capital investment. The primary investor industries are healthcare and technology. Netflix and Amazon are also among the 10 best income funds, which contribute towards the top holdings; The Growth Fund of America, launched in 1973, has exhibited a continually good performance since its inception with assets worth $141 billion now. Its annualized return every five years is 13.78%. About 25% of the fund is invested in foreign equities with top holdings in Amazon, Alphabet, Home Depot, Gilead Sciences; Washington Mutual Investors Fund with $75 billion in assets, was launched in 1952 to provide income and capital growth. It has a five-year annualized return of 13.18%. The portfolio is dedicated to industrial sectors such as Microsoft, Wells Fargo, Boeing and Coco-Cola with a primary absence of sectors related to alcohol and tobacco industries; The Fundamental Investors Fund with $71 billion in assets, was launched in 1978. It has a five-year annualized return of 13.18% with a primary goal of capital appreciation and a secondary goal of providing income.

According to Forbes, the top mutual funds to invest in this year would be Driehaus Emerging Markets Small Cap Growth Fund (DRESX which employs a growth equity investment concept. It has assets worth $319 million but is often overlooked by investors causing it to be lower in efficiency; Ridgeworth Seix Floating Rate High Income Fund (SAMBX) which focuses on floating rate bond funds. This primarily began when the U.S. Federal Reserve focused on maintaining low interest rates which led to inflation in the value of investment grade bonds. Because this could spell disaster if someone invests, central bankers targeted extremely low rates to improve job opportunities and higher wages. However, once interest rates started to rise, bond investors found themselves; losing out on bond exchange-traded funds. That is when the solution of floating rate bond firms was given. Now, should interest rates rise, investments that hold paper are exactly what investors require to surf the bond market meltdown; Vanguard FTSE All-World ex-US Index Fund (VFWIX) which as expensive stocks and compares valuations to determine current stock prices. Forbes also contends that 2017 will pay significant dividends of 6-7% to income investors mainly because rate hikes will be a letdown. To boost your dividends, trade in your common shares for the preferred variety. Your dividends will go up by 100 to 150%.

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