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The 8 Best Income Funds for a Scared Market

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If 2017 was the year without fear, 2018 feels like the year of … well, fear. And that means investors should have income funds and other dividend strategies at the top of their minds right now.

The CBOE Volatility Index – aka “the VIX,” aka “the fear index” – exploded earlier this year from less than 10 to more than 37. That occurred about a month into 2018 as the stock market fell to multimonth lows. The VIX spiked again in March and has remained elevated – at least compared to last year – since then. The market itself, meanwhile, is barely clinging on to fractional gains.


This has been a frustrating year for investors in search for direction. But those who have put income strategies to work likely have stomached the process with a little more ease. Don Wilson, CIO of Atlanta-based investment company Brightworth, says flat and down markets are a good time to put lower-risk, higher-quality income strategies to work. “In down markets, conservative, boring, higher quality and lower-yielding bonds usually hold up much better than higher yielding and lower quality investments,” he says.

Certain income funds not only provide dividends to help offset losses, but they prove particularly resilient during times of high volatility. A few were even able to hold their value during the selloff of early 2018.

Here’s a look at eight income funds that investors should explore if they’re looking to weather an uncertain 2018 while generating some extra cash.

SEE ALSO: The 25 Best Low-Fee Mutual Funds You Can Buy

Data is as of May 29, 2018. Yields represent the trailing 12-month yield, which is a standard measure for equity funds. Fund expenses provided by Morningstar.


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