I had £1,890 available to invest for passive income. Here’s what I did next!

I know I have a healthy cash flow going into my Stocks and Shares ISA. So I have been thinking of ways to use this to increase my passive income.

On Friday I received £1,611.30 for the shares I previously owned in Biffa. The waste management company was bought by a US private equity firm in a deal that was completed in late January.

As a side note, the deal valued Biffa shares at 410p, higher than the 186.4p I bought them back in 2017. Not a bad little earner that, once again, underlines the wisdom of long-term investment!

I have a couple of hundred pounds sitting in an ISA there. This gave me £1,890 which I used to open the position Artemis High Income fund.

Rebalancing my portfolio

Regular readers will know that we at Fool believe that stock investing is one of the best (if not at the best way to generate long-term returns.

Through a combination of capital appreciation and dividend income, they tend to provide an average annual return of 8%. This is why Stocks and Shares ISAs are so popular for UK stocks.

However, we also believe that a diversified portfolio has great benefits by reducing risk. So I’ve been looking for ways to boost my exposure to less risky assets like bonds.

In my opinion, the Artemis High Income fund is a good way to achieve this. This investment fund still gives me exposure to the global stock market. But the goal is to plow the majority of investors’ cash (80-100%, in fact) into government and corporate bonds.

A regular outperformer

More specifically, this fund focuses on high yield bonds. As a result, it now yields a tasty 6% distribution yield.

The downside is that 57.4% of Artemis High Income’s portfolio is filled with non-investment assets. Lower quality assets like these provide higher yields. However, they also have higher inherent risks.

That said, the quality of the investment team behind the fund has convinced me that I am not investing in a money trap.

Fund manager David Ennett has been described as “talented high bond fund manager” by Hargreaves Lansdowne (who have also put Artemis High Income on the shortlist of their favorite wealth funds). They also have the support of the renowned fixed income team at Artemis.

Indeed, the fund’s higher performance than other funds with similar assets (as illustrated in the graph above) is a testament to the strength of the team at Artemis.

I also like that Artemis gives you the option to receive monthly income. This means that I do not have to wait a long time to reinvest the money I receive, giving me a greater chance to supercharge my wealth through the miracle of compounding.

I plan to continue devoting most of my spare cash to invest in UK shares. But buying funds like the ones above can also be an important part of a winning portfolio. I definitely expect to significantly boost my long-term passive income.