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Fund Spy: Morningstar Medalist Edition

Will You Sacrifice Returns for Income?

Multiasset income funds often pursue yield at the cost of total return.

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We recently released a study of the generally disappointing results that much-hyped objectives-based investments have delivered to investors. A summary of the research can be found here and the full paper here. Today's article looks more closely at income-focused multiasset funds, the most popular subset of objectives-based investments.

Investors' desire for higher income is nothing new, but the past seven years' low-yield environment has made the task more difficult. In that sense, income-focused funds have offered some relief: Our review of multiasset income funds shows that they roundly deliver higher yields than the typical allocation fund, as well as a simple blended index.

Janet Yang, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.