I would not gamble on that happening again.Five new implementation partners-Doughnut Economics Action Lab, Evergreen Action, Rewiring America, Seneca Solar, and The Outdoor Policy Outfit-also join the effort to turn the tide on climate change ‘The top funds have total returns of around 90% and that is going gangbusters. ‘The danger is that anyone who has taken a lot of risk in drawdown will feel is how things are and will continue to be,’ he said. The strong period for stock markets has helped those drawing an income from these funds, allowing them to do so without eating too much into their capital.īut Selby warned investors not to become reliant on this bullish market environment persisting, pointing to a 4% limit as a good rule of thumb. Selby said the popularity of growth funds reflected the fact that, with access from age 55, many investors were still looking to grow their pot. Dividends paid by most popular funds Fund The Baillie Gifford run-fund that focuses heavily on technology and ‘unicorn’ hunting has turned £100,000 into £161,110 over the past four years, even with £5,000 being withdrawn each year. Selby said investment trusts ‘can be great vehicles for people who just want to withdraw the dividends their investments produce’.Īlthough he added that investment trusts ‘can deliver great total returns too’, pointing to the most popular trust on the list, Scottish Mortgage, which yields just 0.6%. Murray International (MYI) produced a natural yield of £17,590 on a £100,000 fund over the four years, and splitting a portfolio of £100,000 over the top 10 most popular funds would have delivered a natural yield of £9,108 and the pot would be worth £136,710. Investment trusts – which make up six out of the top 10 most popular drawdown funds – produce the highest natural income without investors having to sell an investments. With income being a priority for retirees in drawdown, a high natural yield is a draw for investors. He said that returns like those delivered by Fundsmith ‘makes even the punchiest withdrawal look sustainable’ and retirees invested in the fund could have taken £15,000 a year and still have a pot worth £100,000 today. Returns since 6/4/15, income taken quarterly.ĪJ Bell analyst Tom Selby said the stock market has delivered a ‘golden combination of income and capital preservation’ over the past four years. But growth-focused funds, like Fundsmith, FTSE 100-listed Scottish Mortgage (SMT) and Lindsell Train Global Equity, are among the most popular. The portfolio would still be worth £96,170 after the £5,000 annual withdrawals.Ĭity of London, which has grown its dividend every year for more than half a decade, is an unsurprising choice. If a retiree had invested £100,000 in the fund at the dawn of pensions freedom and taken £5,000 a year in income, they would have £165,100 remaining today.Įven the worst performer among the top 10 most popular funds, 4.4% yileding City of London ( CTY) investment trust, wouldn’t have left investors in a precarious position. It’s with good reason that Smith is such a popular choice as he is also among the top performers over the timeframe. Online stockbroker AJ Bell has revealed the top 10 funds its retirees have ploughed their drawdown money into and Citywire AA-rated Terry Smith’s Fundsmith Equity is the most popular fund in their portfolio.

Before, drawdown was only an option if you had a guaranteed income of £20,000 a year. Since 6 April 2015, over-55s no longer had to buy an annuity with their pension fund to secure a retirement income, they could keep their savings invested and withdraw a percentage to live on. Pension freedom marked a sea-change in retirement. Investors moving into drawdown since the introduction of pension freedom have been blessed with a strong few years for stock markets, leaving many happy to take income from their capital returns rather than rely on 'natural' yield.

Drawdown funds