Are mutual funds investment vehicles that only have retirement in mind?

Question

Are they geared to provide income ONLY for retirement or can they be used as an investment vehicle that I could use to supplement my income now?

Answer 1

There are virtually all kinds of mutual funds serving many different purposes.  And, yes, there are mutual funds that provide a steady stream of income.  But, be careful.  Income only mutual funds have a tendency to to perform poorly over the long term because they are geared to providing income now rather than capital appreciation.  Of course, for people who require income now they do provide that.  Normally, a good plan for a person in that situation is to invest a portion of ones assets in an income producing mutual fund and a portion in a capital appreciation mutual fund or better yet a family of such funds.  

Now here are a few mutual funds that do provide regular monthly distributions of income. These are mainly closed end mutual funds.



GIM  price 8.94  monthly distribution 0.042  average annual return 11%

FT price 6.01 monthly distribution 0.038 average annual return 7.8%

RPF price 14.95 monthly distribution 0.16 average annual return 14.%

PGF price 18.68 monthly distribution 0.12 average annual return -12% Not everything is hunky dory in mutual funds ville.

This site will provide you many other opportunities for finding monthly income distributions

http://www.etfconnect.com/select/rank/de...