Income can come in many different shapes and sizes, and that's the gist of the latest fund launch to come from BlackRock. The asset manager is bringing two income-focused exchange traded funds (ETFs), iShares World Equity High Income (WINC) and iShares US Equity High Income (INCU), to the European market. Bar the fact that these are, unusually, a pair of actively managed ETFs, they seem to follow one of the income playbooks of buying dividend-paying stocks but also selling index call options on top of that to boost the income.
Plenty of so-called 'maximiser' funds already exist, and we have covered the fact that funds such as Schroder Income Maximiser (GB00BDD2F083) tend to dole out handsome volumes of income in the past. But how has a "high income" strategy worked in the ETF space?
Here, it's worth taking a look at the UK market, given it remains such a competitive source of yield. A few years ago, we ejected the iShares UK Dividend ETF (IUKD) from our Top 50 ETFs list on the basis that a fund targeting a high level of income might look overly exposed to the dividend cuts that worked through the market in 2020. The fund has held up better than we might have expected since, but still faces plenty of competition.