By 
You receive a monthly income while you are working and pay many of your bills 12 times a year, so wouldn’t life be a lot simpler if you could receive your retirement income on a monthly basis, too?
Unfortunately, many popular income funds pay dividends only every quarter, which gives investors the problem of matching lumpy income with their regular outgoings.
One solution is to choose from the handful of portfolios that exist to provide a stable monthly income.
Some monthly income funds invest in stocks, while others opt for bonds; the latter tend to offer a more stable income but less opportunity for income growth. We also include some “multi-asset” funds, which combine the two.
To cover all eventualities, Telegraph Money has identified 10 funds that have a proven ability to provide a reliable monthly income.
Threadneedle UK Monthly Income
This fund has managed to combine an attractive dividend yield with strong capital returns. Jonathan Barber, the fund manager, has been in charge since 2002, and has returned 214pc, beating the average peer and the FTSE All Share index. A £10,000 holding would have paid £5,944 in income during the past decade.
The £430m fund has a yield of 4.8pc, and invests in larger companies that pay high dividends, such as Royal Dutch Shell, the oil giant, and GlaxoSmithKline (GSK), the drugs maker. It costs 0.88pc per year.
Premier Monthly Income
Chris White has run this fund for nine years and has made investors 118pc, outperforming rival funds and the London stock market as a whole. A £10,000 investment would have paid £5,595 in income.
The £196m portfolio invests predominantly in companies in the FTSE 250 index of medium-sized stocks, although some of its largest holdings include dividend stalwarts Shell and GSK. It yields 5.2pc and charges investors 0.96pc.
Axa Framlington Monthly Income
Performance has fluctuated over George Luckraft’s 17-year tenure, but the fund has beaten its peers and the benchmark index during the past decade. Over three years, it has been among the top 25pc of income funds.
The £380m portfolio is equally split between large stocks, medium or small businesses and those quoted on the Alternative Investment Market (Aim).
It yields 4.6pc and would have paid out £5,926 from a £10,000 holding over the past decade. It charges 0.84pc.
Schroder ISF European Equity Yield
This is the only European fund available to British investors that pays a monthly income. The €118m (£100m) portfolio has been run by Andrew Evans and Andrew Lyddon since April 2016, and has been among the best European funds: it has returned 54pc during their tenure, despite high charges of 1.83pc per year.
It has paid income of £2,335 on a £10,000 investment since the pair took over, and currently yields 3.6pc.
A third of the fund is invested in Britain, with the remainder across the rest of Europe. Financial companies and energy firms make up 51pc of the portfolio.
BlackRock GF Emerging Markets Equity Income
Emerging markets may not sound like an obvious place for income investors, but dividend growth in these regions is higher than anywhere else in the world.
Emily Fletcher and Stephen Andrews, the fund’s managers, have been in charge since April 2018 but maintained former manager Gordon Fraser’s style and returns. Since 2014, savers would have received income of £3,125 from a £10,000 investment, and would have made a total return of 67pc – beating peers and the market average – despite high charges of 1.88pc. The fund yields 3.4pc.
Fidelity Multi-Asset Income
This cautiously run fund has been managed by Eugene Philalithis since 2013, and has paid income of £1,690 from a £10,000 investment. The fund is different as it predominantly invests in other Fidelity funds. It has made a total return of 27pc during Mr Philalithis’s tenure, among the best in its group.
The fund has a 35pc limit on how much can be invested in stocks, while the remainder is held in lower-risk bonds and other assets. It charges 0.64pc a year and has a yield of 4.3pc.
Artemis Monthly Distribution
For those willing to take a little more risk, Artemis Monthly Distribution can hold up to 60pc of its money in shares, although currently the figure is around 45pc. Management is split between Jacob de Tusch-Lec, who runs the stock portfolio, and James Foster, who handles the bonds.
The pair have managed the fund since its launch in 2012, and have returned 106pc to investors.
An initial investment of £10,000 would have produced £4,189 in income, and the fund currently yields 4pc. It has an annual charge of 0.84pc.
Wise Multi-Asset Income
One of our most high-risk picks, this fund has the flexibility to put as much of its money in shares, bonds or alternative assets as the team wishes. It is run by Tony Yarrow, who invests predominantly in stocks and specialist investment trusts.
Since its launch, the fund has beaten the FTSE All Share index and its peers. During this period, it would have paid income of £7,525 from a £10,000 investment. It yields 5.4pc and costs 0.88pc.
Baillie Gifford Strategic Bond
Torcail Stewart has run this fund since 2010; co-manager Lesley Dunn joined in 2018. The £1.3bn portfolio has produced the second-best performance in its sector since Mr Stewart took charge. A £10,000 holding would have netted £4,479 in income.
The fund yields 3.6pc and charges 0.52pc, one of the lowest fees for a fund of this type. The bulk of the portfolio is in corporate bonds rated medium risk by credit ratings agencies.
This middle ground typically means the bonds yield more but are still not likely to default.
Liontrust Monthly Income Bond
This fund invests only in corporate debt, and has been run by Stuart Steven since its launch in 2010. He is now one of three managers.
Since 2010, it has made investors 72pc and paid income of £5,394 from £10,000 invested. It yields 5pc and has a fee of 0.65pc.
Two thirds of the portfolio is invested in bonds issued by British companies, with the remainder spread across Europe and America.
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