3 Jupiter income funds that will turbocharge your investments

Jupiter is a popular fund manager with a wide range of unit trusts. They have a nice range of income generating funds that can be used to generate useful income.

These Jupiter funds can be held in a stocks & shares Individual Savings Account (ISA), a Self Invested Personal Pension (SIPP) or a share dealing or fund account.

The Jupiter Monthly Income fund is my personal favourite Jupiter fund. As the name suggests, the fund pays out a regular monthly income, so it can be a useful investment for anyone who wants to live in the interest payments from their investments.

There are a wide range of monthly income options available for income seeking investors. The Jupiter Monthly Income fund is a little different from other fund manager's offerings in that it mainly invests in investment trusts. Thus it acts as a sort of fund of funds in the investment fund niche.

The fund has around 100 holdings, mainly of investment trusts. The fund manager has a lot of flexibility in being able to choose where the funds are invested. Holdings within the Jupiter Monthly Income fund have included these investment trusts:

• Aberdeen Asia Income Fund
• Schroder Oriental Income Fund
• British Assets Trust
• Henderson High Income Trust
• City Natural Resources High Yield Trust
• Morant Wright Japan Income Trust
• Henderson Global Property Companies

The investment trusts are mostly in the equity theme, but there are also holdings in bonds as well as commercial property.

While it is possible to directly buy shares in investment trusts to hold within an ISA or SIPP, holding the Jupiter Monthly Income fund allows experienced fund managers to make the decisions about what investment trusts offer the greatest opportunities for investment income.

Although the Jupiter Monthly Income fund has performed well for me (I bought a lot of units in early 2009 when the yield was over 10%), there are a couple of irritations. Firstly there is usually a significant spread between the buy and sell price quoted for the unit trust. Thus if you need to sell the fund you're faced with an immediate loss. Secondly, the Total Expense Ratio (TER) of the fund is quite high.

As with most unit trusts there is a high initial charge when buying units, although online share dealing accounts or discount brokers such as Hargreaves Lansdown will tend to refund much or all of this initial charge.

If income is less important then the Jupiter Monthly Income fund is also available as accumulation units. These reinvest dividends so the fund holdings will grow in value over time.

Corporate Bonds offer good returns for investors seeking an income. The Jupiter Strategic Bond fund pays a quarterly dividend. Strategic Bond funds have a flexible investment mandate, so the investment fund manager is able to invest in bonds that they think offer the best prospects.

The Jupiter Strategic Bond fund invests both in UK and overseas bonds. Both corporate bonds as well as government bonds (gilts) are represented in the fund's holdings.

Japan has long disappointed investors as the Japanese stock market has been on a downward trend for many years after the bubble burst in 1989.

Despite the poor performance, there are always commentators who think that the Japanese stock market has turned the corner and could perform well in future years. Japanese companies are highly efficient and there are many world leaders in fields such as car making (Toyota) and consumer technology (Sony, Canon). Despite the aging population, Japan is realising that China is a gigantic market on its doorstep, and the rest of Asia is booming.

Asian stocks don't generally pay dividends. However, they are slowly starting to realise the value in returning cash to investors in the form of dividends.

A lot of Japanese businesses are awash with cash. For many years they have invested in new plant and machinery in order to make use of the cash. Slowly they are realising that this investment has largely been wasted, and that paying dividends to investors may be a better use of this cash. Hopefully dividends will increase in future years, meaning that the yield from the Jupiter Japan Income fund might increase to the levels seen with UK and European Equity Income funds.

Although unit trusts may be bought directly from the fund manager, they often have high initial charges. Some investors like to buy unit trusts from their bank, but again there could be high charges involved. High street banks usually only have a limited range of funds available, and they may only sell their own funds, or those from one or two fund managers.

Online discount brokers such as self trade, iii and Hargreaves Lansdowne and fund supermarkets are a good place to buy unit trusts. You can have access to a wide range of investments and manage them all yourself online.

If you want income from your Jupiter Income fund investments then discount ISA providers such as Hargreaves Lansdowne allow income to be withdrawn to a bank account on a monthly basis. This is useful for the Jupiter Income funds that pay out a monthly income, such as the Jupiter Monthly Income Fund.

The author of this article is not authorised to give financial advice. This article does not consitute financial advice. Before making investment decisions consult an independent financial advisor.