Investing for a return

[DavidA]

We are looking to go away sailing and travelling for a considerable period of time at least 2 years. I therefore want to put a tranche of my SIPP in to an investment that might give me 6% return per year. The remainder can stay in their current investments for the long term.
It then means AJ Bell can manage my drawdown to provide income when I am halfway round the globe. It also means I don't have to keep looking at what's going on.

Is there a fund or a combination of funds/trusts that at a minimum could provide a 6% return or am I asking too much in the current market?

[Laughton]

Well, there are PIBS, preference shares and bonds that will give you more than that. But the investing landscape may well have changed in the two years you'll be away. Spreads can be wide so you will probably lose out selling if you have to. As with everything, no guarantees that the investments will be worth what you paid for them when you return.

Current yields on some:-

AV.A - Aviva Prefs 7+%
42TE - Co-Op Notes 7+% (mature 20/12/2025)
INVR - Investec Prefs 9%
ELLA - Ecclesiastical 7+%
GACA - Gen Acc now Aviva - 7+%
NWBD - Nat West Prefs 7%
SAN - Santander Prefs 7+%
IPF3 - Int. Pers Finance Notes - 10% (mature December 2027)

But you need to be sure these are really what you want and double check the yields as small changes in price and your dealing costs can make big difference. DYOR. I hold all the above - so I'm biased.

Pretty sure that all the above with the exception of Co-Op pay out twice yearly. Co-Op pays out only once and that's in December.

There are fixed term bank savings accounts that will give you not far off what you want - and no investment risk or bid/offer spread to worry about if you keep balances below £85,000.

[Urbandreamer]

Well you could start by using the Aic stock screener to identify any that interest you.
https://www.theaic.co.uk/research-tools

Personally I hold few with that high a yield. However I do quite like Trig with it's 7% yield.
https://www.theaic.co.uk/companydata/re ... ture-group

[dealtn]

Personally I wouldn't take advice from anybody that confuses "yield" with "return".

What's your risk appetite and variance from that 6%?

Are you factoring in the effects of inflation? Are you looking for a net or real return?

[Laughton]

[88V8]

Personally I wouldn't take advice from anybody that confuses "yield" with "return".

Given where we are in the rate cycle and the prices of FI, I think that a positive capital return is eminently possible from Laughton's suggestions over the next two years and I have high six figures committed on that basis. Indeed, given that the yields alone meet the 6% requirement, and the fact that it would take a Black Swan to reduce FI prices from where we are today, I think it is almost a given.

Of course, the difference vs the OP is that, DV, I will be here to tinker if events prove otherwise.

V8

[tacpot12]

The only investment I hold that has consistently yielded over 6% is Investco's Bond Income Plus (BIPS). This is an Investment Trust.

I do have a larger holding of an EFT, iShare UK Dividend UCITS ETF, that has yielded 5.8% on average over the last 5 years. This is looking very cheap at the moment, and I wish I had the money to by more of it.

[77ss]

We are looking to go away sailing and travelling for a considerable period of time at least 2 years. I therefore want to put a tranche of my SIPP in to an investment that might give me 6% return per year. The remainder can stay in their current investments for the long term.
It then means AJ Bell can manage my drawdown to provide income when I am halfway round the globe. It also means I don't have to keep looking at what's going on.

Is there a fund or a combination of funds/trusts that at a minimum could provide a 6% return or am I asking too much in the current market?

As ever, it depends upon what you mean by 'return' and your needs.

6% dividend income may be achievable. Generally you need to be aware that this will often be accompanied by a loss of capital. The two possibilities mentioned by another poster (no disrespect intended - it all depends on circumstances/objectives/needs), are cases in point. Both the iShare and Invesco items having shown capital decline over the past few years.

[Urbandreamer]

We are looking to go away sailing and travelling for a considerable period of time at least 2 years. I therefore want to put a tranche of my SIPP in to an investment that might give me 6% return per year. The remainder can stay in their current investments for the long term.
It then means AJ Bell can manage my drawdown to provide income when I am halfway round the globe. It also means I don't have to keep looking at what's going on.

Is there a fund or a combination of funds/trusts that at a minimum could provide a 6% return or am I asking too much in the current market?

As ever, it depends upon what you mean by 'return' and your needs.

6% dividend income may be achievable. Generally you need to be aware that this will often be accompanied by a loss of capital. The two possibilities mentioned by another poster (no disrespect intended - it all depends on circumstances/objectives/needs), are cases in point. Both the iShare and Invesco items having shown capital decline over the past few years.

Indeed. I myself own an IT that is showing consistent capital decline, that fits the yield requirement. I'd very much hesitate to recommend it though, because of that decline. It yields 12%, but in return terms you would have to factor in the decline which, arguable, would bring the return down to less than 2%.

[vand]

Short term govt notes are the only sensible option here if you absolutely need the principle back in 2yrs - nothing else will guarantee you return of principle.

If you are prepared to leave your money in for longer than 2yrs then you can start to look at mixing in other riskier options that might still return more if you can afford to wait.

[88V8]

Personally I wouldn't take advice from anybody that confuses "yield" with "return".

Given where we are in the rate cycle and the prices of FI, I think that a positive capital return is eminently possible from Laughton's suggestions over the next two years and I have high six figures committed on that basis. Indeed, given that the yields alone meet the 6% requirement, and the fact that it would take a Black Swan to reduce FI prices from where we are today, I think it is almost a given.

Of course, the difference vs the OP is that, DV, I will be here to tinker if events prove otherwise.

As a rider to the above, I expect many of Laughton's Prefs picks to be tendered in the next two years, and given that the default will be 'do nothing' that could leave an absent holder with part of a less liquid rump.
So it depends what the OP has in mind when he says 'I don't have to keep looking at what's going on.'

V8

[DavidA]

Thank you for all your responses I am beginning to learn a lot more already.
I am not looking to factor in inflation as this is included in our budget. So it is a straight 6%. Which from reading all the comments means a positive return of this. If 6% is not possible then please let me know I can then factor in reduction of capital in future.
Currently the money is tied up in my SIPP so I cannot simply put it in a bank savings account.
I am liking something that pays out twice a year as this could go straight in to the drawdown pot and therefore be more easily managed from afar.
Hope this helps

[DavidA]

Urbandreamer thanks for those links that gives me a lot more research to do once I understand all the headings.