5 great high yield investments that will turbocharge your investments

Searching for a high yield from your investments?

Here are a few ideas for high yielding investments. All of these investment ideas may be held within an Individual Savings Account (ISA) as well as a Self Invested Personal Pension (SIPP) and a standard trading account as offered by the many online discount brokers or fund supermarkets.

Before investing be sure to seek professional advice from an independent financial advisor or other expert.

High yielding shares are an obvious choice for the income seeker. Large companies like BP, Shell, GlaxoSmithKline, British American Tobacco and many others have good cash generative businesses and tend to pay out annual dividends in excess of 5%.

Buying individual shares tends to be more risky for smaller portfolios, so an alternative is equity income funds. These invest in a number of companies that pay out good annual dividends. While equity income funds tend to lag behind growth and smaller company funds when stock markets rise, they tend to outperform in bear markets.

Popular equity income funds include the Newton Higher Income fund, which has a good track record of growing dividends over time. Other popular equity income funds with good yields include the Artemis Income, Threadneedle UK Equity Alpha Income and PSigma Asset Management Income.

Corporate bonds are loans to companies. In return for borrowing your money, a company will pay an annual amount of interest. The amount of interest depends on how large the company is, its credit rating and income from its business activities. Bonds are considered a useful source of high yielding investment income.

It is possible to buy individual corporate bonds within a stocks & shares ISA or SIPP. For many years corporate bonds were only available for investors with a lot of money to invest. Individual corporate bonds can now be purchased by smaller investors via the London Stock Exchange.

Corporate bonds rise and fall in value according to the issuing company's prospects and many other factors.

Most private investors tend to prefer buying corporate bonds via a unit trust, investment trust or ETF. The advantages of these is that the manager of the investment can make the decisions as to which corporate bonds offer the best value. Most corporate bond unit trusts and ETFs also invest in a basket of bonds issued by different companies - this helps to reduce the risk should a company go bankrupt and be unable to repay its bond holders.

Corporate bond funds that are popular with investors include the Invesco Perpetual Corporate Bond, Old Mutual Corporate Bond and Jupiter Corporate Bond.

There are a number of corporate bond Exchange Traded Funds, the most popular of which is the iShares Corporate Bond ETF (LSE stock symbol SLXX). This invests in a number of different corporate bonds and pays out a quarterly dividend. The ETF has a very low annual fee, so is particularly popular with longer term investors.

Strategic bond funds are similar to corporate bond funds. However, they have a broad mandate and are free to invest in any bonds that look attractive to hold within the unit trust.

Strategic bond funds are free to invest in low risk corporate bonds, as well as riskier "junk" bonds offered by higher risk businesses. Strategic bond funds will also be able to invest overseas should returns in other markets look attractive.

Covered call funds have been largely overlooked by private investors in their search for high yielding investments. They do however offer some really great returns, especially in volatile stock markets like those experienced since the financial crash of 2008.

Covered call funds are similar to equity income funds. They invest in 50-100 different high yielding company shares. Typically for a UK based covered call fund these will be derived from the FTSE 100 and FTSE 250 stock indicies.

The neat thing about covered call funds is that they sacrifice some of the increase in value of the shares by writing covered calls. The covered calls can be used to enhance the income derived from the shares, boosting dividend returns payable from a fund employing this strategy.

Covered calls are pretty complicated, so the nice thing with a covered call unit trust is that the fund managers get to do all the complex mathematics on your behalf.

There are three covered call equity income funds - the Schroder Income Maximiser is the best well known. Worth considering are the Premier Optimum Income Fund and the Insight Equity Income Booster fund. All three funds pay out quarterly dividends. They are also available as either income or accumulation units.

There is additional risk with these funds in that the fund may perform poorly should the fund manager make bad decisions about the future direction of the stock, so this must be weighed up against the possibility of receiving higher dividend payments compared to a standard equity income fund.

Commercial property funds pay dividends, plus there is the chance of capital growth should the value of the underlying properties appreciate. UK based commercial property funds tend to pay higher dividends than commercial property funds focussed on European, North American or Asian property markets.

Popular commercial property funds with good yields include the Aviva Investors Property Investment Fund, Henderson UK Property and Ignis UK Property Fund. The Ignis UK Property Fund is particularly useful for income seekers as it pays out a regular monthly dividend.

Commercial property funds are better suited for longer term investors, since there tends to be high bid/offer spreads meaning that the units will lose value as soon as they are purchased. Commercial property funds also tend to stop redemptions of units should the property market prices fall in order to prevent properties from having to be sold at knock-down prices.

Comments? Suggestions for other high yielding investments? Leave feedback below!

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.