Income maximiser funds use derivatives to boost their income so typically offer higher yields than conventional funds
To do this they sacrifice some of the capital growth of their holdings
For this reason they are not a good idea if you are looking for the best possible total return over the long term
2020 was a tough year for income investors with 505 UK-listed companies having cancelled, cut, or suspended their dividends between 1 January and 23 November, according to fund provider GraniteShares. And although some companies have resumed dividend payments it is likely to take a while for payments to get back to where they were.
Being well diversified geographically and tapping into overseas equity income is a key way to mitigate falls in the UK, though overseas companies have also not been immune to the economic problems that have resulted from the Covid-19 pandemic. Another potential option is income maximiser funds which invest in equities, but also use derivatives to boost their income and typically offer higher yields than conventional equity income funds.