5 Highest Yielding Investment Trusts

THE INCOME INVESTOR: Looking for income? These investment trusts have a portfolio of high yielding international stocks and an inflation beating dividend

Emma Wall 6 May, 2014 | 4:31PM

Inflation may have fallen – but income remains as important as ever to investors. Bank of England governor Mark Carney indicated last summer that interest rates would rise once unemployment fell – but the goalposts have been moved. Investors who once relied on cash interest rates to provide them with an income have been forced to look elsewhere.

Neil Lovatt, director of ISA and Savings at Scottish Friendly, said: “Inflation in April fell to a five-year low of 1.6%, but currently no instant-access cash ISAs offer better than inflation rates. This means that on average a sum of £1,000 invested five years ago in a tax-free deposit account would be worth just £1,007.69 today.”

Carney has given no indication as to when interest rates may rise again, and his US counterpart Janet Yellen is remaining just as cagey.

But income seekers have options. Corporates have returned to rude health, even if economic measures remain scolded from the recession. Companies are rewarding shareholders with dividends now that they have cash to spare again. Here we reveal the five investment trusts that are paying out the biggest yields. Investors should remember to consider all of a fund’s merits, not just the yield before investing, some of these trusts are only suitable for a niche holding.

Jupiter Dividend & Growth (JDT)

Yield: 12.8%

Objective: To provide a high and rising income together with the possibility of capital appreciation from UK equities, UK equity-related securities and fixed interest securities.

Duet Real Estate Finance (DREF)

Yield: 10%

Objective: To provide shareholders, through investment in its Master fund, with regular dividends and an attractive total return while limiting downside risk to capital, through exposure to European commercial real estate debt.

M&G High Income (MGHU)

Yield: 9%

Objective: To achieve above average and increasing income and capital growth from UK stocks.

British & American (BAF)

Yield: 8.6%

Objective: Invests predominantly in Investment Trusts and other leading UK-quoted companies to achieve a balance of income and growth.

Princess Private Equity (PEY)

Yield: 8.3%

Objective: Invests in a diversified portfolio of private equity and private debt investments to achieve long-term capital growth and an attractive dividend yield.

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
British & American Ord45.50 GBX5.81
Princess Private Equity Ord11.20 EUR0.00

About Author

Emma Wall  is former Senior International Editor for Morningstar

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