one third of inv trusts yield more than ftse 100

Income-hungry investors could do worse than looking to conventional investment companies, as 33% yielded more than the FTSE 100 annual average in the year to 31 October.

one third of inv trusts yield more than ftse 100


According to statistics published by the Association of Investment Companies, 80 out of 244 conventional members paid higher dividends than the blue chip annual average of 3.2%.

In addition, two thirds of these companies, 55 out of 83, are trading at a discount to NAV.

The highest yielding sector, with an average dividend yield of 7% is Property Direct – UK, which is also trading at an average discount of 4.2%.

Next in line, with an average dividend yield of 6.6% and trading at a 0.6% discount is the UK High Income sector.

Annabel Brodie-Smith, communications director for the AIC, said: "Investment trusts have the ability to sustain their dividends by building up their reserve in good years which allows them to pay dividends in difficult years.

"They do this by retaining up to 15% of the income they receive each year and transferring this to their revenue reserve. Known as ‘smoothing’ dividends this is one of the defining characteristics of the sector."

The highest yielding investment trust in the year to 31 October was British & America, which had an annual average dividend of 11.1% and was trading at -13.4% to NAV.



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