ISA recommendations

It is not just pensioners who welcome the extra cash who consider income funds valuable. Many investors consider them to be core holdings of their portfolios - but reinvesting the income in buying more units - and thus growing the holding over time. See what our expert financial advisers have to recommend as the pick of the crop.

Investors looking for income
Mark Dampier of Hargreaves Lansdown recommends the £1,021m Invesco Perpetual Income fund, managed by the highly rated Neil Woodford. He says: "This fund invests in good, solid defensive stocks and is run with a view to total return. Woodford is one of the very best managers in the industry".

Gavin Haynes at Whitechurch Securities recommends the £450m Invesco Perpetual Monthly Income Plus. He says "I would go for this high-yield corporate bond fund that invests in the US and the UK, with a 20% investment in equities. The bond element is well managed by Paul Reed, while Neil Woodford looks after the equity side. The current yield is around 7.5-8%, so should provide above average income".

Ryan Hughes at Chartwell Investment plumps for the Framlington's £141.5m Equity Income Fund, run by George Luckraft. Hughes explains: "Most income funds are a bit samey, but this one is really different. It invests in a wide range of equity, from larger companies right the way down to small caps that have offered pretty high yields. This fund would make an interesting addition for someone who already has income funds".

Charlie Barlow at Bestinvest also goes for Tim Russell's Cazenove UK Growth & Income fund. He says: "The main objective of the fund is to consistently outperform the All-Share by 1.5 per cent per year. Russell is one of the most consistent fund managers in the UK."

Paul Ilott at Bates Investment recommends the Newton Higher Income fund, managed by Clive Beagles. This "classic income fund", as Ilott describes it, focuses on 30 UK equities from a pool of 350. Ilott adds: "There has been large exposure to mid caps this year, and Beagles has been increasing exposure to larger companies. He has a proven track record as a stock picker". Ilott also rates the £1,015m Credit Suisse Equity Income fund, which was run by Bill Mott until June 2003 and has been taken over by Leigh Harrison.