Merryn's Blog

The highest yielding investment trusts

Here's a list of the highest yielding investment trusts for investors seeking income from their portfolios.

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%).

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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.

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.

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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

NameDiv yld (%)Market cap (£m)Prem/(disc) (%)1yr NAV Gwth (%)3yr NAV Gwth (%)
European Assets7.482(10)(20)12
Shires Income6.6543(7)31
Henderson High Income6.61144(6)28
Merchants6.53654(12)26
Schroder Income Growth5.5125(5)(7)20
British Assets5.4330(1)(13)19
Henderson Far East Income5.42953(5)13
Middlefield Canadian Income5.2853(16)59
Baclrock Commodities Income5.11073(22)5
Dunedin Income Growth5.03191(6)32
JPMorgan Global Emerging Income5.01834(5)N/A
Aberdeen Latin American4.860(3)(11)N/A
City of London4.76825(3)34
Standard Life Equity Income4.7103(4)(8)21
Value and Income Trust4.679(19)(8)33
Edinburgh Investment Trust4.69307140
Murray Income4.64082(4)33
JPMorgan Claverhouse4.6217(7)(12)20
TR Property (Ord)4.5373(12)(21)22
Scottish American4.52805(14)35
JPMorgan Mid Cap4.492(15)(14)19
INVESCO Income Growth4.4123(0)(0)36
Schroder Oriental Income4.22651(1)57
F&C Capital & Income4.21843(5)19
Manchester & London4.168(11)(24)6
TR Property Sigma Shares4.178(24)(26)22
Perpetual Income & Growth4.1545(0)(2)34
Murray International*4.01,10010(2)41
Securities Trust of Scotland4.01183(3)37
Blackrock World Mining*4.0 est (a)1,025(10)(26)33
Temple Bar4.05305(4)38
FTSE 1003.9(5)23
FTSE 2503.1(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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