Regular readers will know that we are keen on investment trusts in general. Subscribers will also have seen thatthis week's magazine included a model investment trust portfolio. You can see it here (if you are a subscriber, that is).
Our model portfolio didn't focus particularly on income, and some have asked for a list of the highest yielding trusts. Good news, then, that Oriel Securties has just sent me the very thing. The table below shows a list of trusts that mainly invest in listed equities, are over £50m in size, and have a historic yield of over 4% (the FTSE All Share currently yields 3.7%).
None of them made our final list Murray International and Edinburgh Investment Trust were on the short list, but were eventually rejected as trading on premiums to their net assest value(NAV) that we thought were a little too high for comfort.
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We are interested in several of the below, and I'll probably take a closer look at Dunedin Income and Growth, and British Assets. One thing to note is that the income return from European Assets isn't quite what it seems the directors pay whatever dividend they feel is suitable out of both income and capital every year.
The investment trust rules have recently changed to allow other trusts to do this so, as Oriel says, this method of generating yield may soon "become more widespread".
Highest yielding equity funds
| European Assets | 7.4 | 82 | (10) | (20) | 12 |
| Shires Income | 6.6 | 54 | 3 | (7) | 31 |
| Henderson High Income | 6.6 | 114 | 4 | (6) | 28 |
| Merchants | 6.5 | 365 | 4 | (12) | 26 |
| Schroder Income Growth | 5.5 | 125 | (5) | (7) | 20 |
| British Assets | 5.4 | 330 | (1) | (13) | 19 |
| Henderson Far East Income | 5.4 | 295 | 3 | (5) | 13 |
| Middlefield Canadian Income | 5.2 | 85 | 3 | (16) | 59 |
| Baclrock Commodities Income | 5.1 | 107 | 3 | (22) | 5 |
| Dunedin Income Growth | 5.0 | 319 | 1 | (6) | 32 |
| JPMorgan Global Emerging Income | 5.0 | 183 | 4 | (5) | N/A |
| Aberdeen Latin American | 4.8 | 60 | (3) | (11) | N/A |
| City of London | 4.7 | 682 | 5 | (3) | 34 |
| Standard Life Equity Income | 4.7 | 103 | (4) | (8) | 21 |
| Value and Income Trust | 4.6 | 79 | (19) | (8) | 33 |
| Edinburgh Investment Trust | 4.6 | 930 | 7 | 1 | 40 |
| Murray Income | 4.6 | 408 | 2 | (4) | 33 |
| JPMorgan Claverhouse | 4.6 | 217 | (7) | (12) | 20 |
| TR Property (Ord) | 4.5 | 373 | (12) | (21) | 22 |
| Scottish American | 4.5 | 280 | 5 | (14) | 35 |
| JPMorgan Mid Cap | 4.4 | 92 | (15) | (14) | 19 |
| INVESCO Income Growth | 4.4 | 123 | (0) | (0) | 36 |
| Schroder Oriental Income | 4.2 | 265 | 1 | (1) | 57 |
| F&C Capital & Income | 4.2 | 184 | 3 | (5) | 19 |
| Manchester & London | 4.1 | 68 | (11) | (24) | 6 |
| TR Property Sigma Shares | 4.1 | 78 | (24) | (26) | 22 |
| Perpetual Income & Growth | 4.1 | 545 | (0) | (2) | 34 |
| Murray International* | 4.0 | 1,100 | 10 | (2) | 41 |
| Securities Trust of Scotland | 4.0 | 118 | 3 | (3) | 37 |
| Blackrock World Mining* | 4.0 est (a) | 1,025 | (10) | (26) | 33 |
| Temple Bar | 4.0 | 530 | 5 | (4) | 38 |
| FTSE 100 | 3.9 | Row 31 - Cell 2 | Row 31 - Cell 3 | (5) | 23 |
| FTSE 250 | 3.1 | Row 32 - Cell 2 | Row 32 - Cell 3 | (11) | 37 |
Source: Thomson Reuters Datastream. (Table published in Oriel Securities Sector Review 15 June 2012.)
Includes funds primarily investing in listed equities. Excludes funds with market capitalisations of less than £50m. Excludes funds with multiple share classes. Discount/premiums based on estimated NAVs diluted (ex-revenue) at close on 13/06/12. NAV performance figures are based on diluted NAV at FV and are capital return only. (a) BlackRock World Mining has introduced a higher dividend policy in the current year and we estimate a dividend of 23p per share.
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