3 UK shares to buy yielding up to 17%

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published 16 November 2022

If you’re looking for UK shares to buy today, then Alex Harvey of Momentum Global Investment Management has a couple of ideas.

Indeed, the fund manager believes that the UK market offers some fantastic opportunities today, as many stocks trade at a deep discount to international peers following the country’s recent economic and political troubles.

Here are three UK shares to buy today according to Harvey’s analysis.

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UK shares to buy now

A cheap turnaround play: Jupiter Fund Management

The fund manager’s first pick is Jupiter Fund Management (LSE: JUP).

This company is a fund management business “catering to a loyal base of retail investors.” It is also making inroads into the institutional market.

Following the acquisition of Merian Global Investors in 2020, assets under management swelled to more than £65bn. However, in recent years the firm has “found itself caught in the middle between the mega-managers and the boutiques,” and assets have dwindled.

Harvey believes the new CEO Matthew Beesley will help push the business to change. He has been reviewing the fund range and looking to cut costs in an attempt to stabilise client outflows and increase profit margins.

Jupiter looks cheap, and this is its most attractive quality. “Even a halving of the well-maintained dividend (a conservative scenario) would imply a yield of nearly 10%” Harvey notes.

What’s more, when markets do “pick up” today’s price/earnings (p/e) ratio “will look cheap.”

One of the best UK shares to buy for income: TwentyFour Income Fund

The next pick is TwentyFour Income Fund (LSE: TFIF).

This closed-ended investment company owns a portfolio of European asset-backed securities (ABS).

These securities typically pay a “floating rate” coupon, which means the rate of interest fluctuates with the base rate. As such, unlike other debt securities with fixed yields, the payouts on these ABS instruments have been rising this year.

This should “help protect capital values compared with more rate-sensitive fixed-coupon bonds,” the fund manager explains.

TwentyFour has a team of experienced analysts who know what they’re looking for when it comes to debt, so the company seems well prepared to deal with an adverse economic climate.

After recent declines the fund is now trading with a forward dividend yield of 17%. “The fund offers equity-like returns with underlying asset security,” Harvey summarizes.

Bonds are becoming increasingly attractive

Finally, Harvey recommends the exchange-traded fund (ETF) iShares £ Corporate Bond 0-5yr UCITS ETF (LSE: IS15).

This fund owns sterling-denominated investment-grade corporate bonds with a maturity of less than five years.

Only around 40% of underlying exposure is to UK-listed companies, so this is a fund with global exposure.

However, following the recent UK gilt market turmoil, the yield on this investment-grade fund topped 7%.

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Rupert was the former Deputy Digital Editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing.

His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.

Rupert has freelanced as a financial journalist for 10 years, writing for several UK and international publications aimed at a range of readers, from the first timer to experienced high net wealth individuals and fund managers. During this time he had developed a deep understanding of the financial markets and the factors that influence them.

He has written for the Motley Fool, Gurufocus and ValueWalk among others. Rupert has also founded and managed several businesses, including New York-based hedge fund newsletter, Hidden Value Stocks, written over 20 ebooks and appeared as an expert commentator on the BBC World Service.

He has achieved the CFA UK Certificate in Investment Management, Chartered Institute for Securities & Investment Investment Advice Diploma and Chartered Institute for Securities & Investment Private Client Investment Advice & Management (PCIAM) qualification.