The Rule of 300 is broadly similar to the widely used “4% drawdown rule”, which suggests retirees need savings worth around 25 times their annual spending.

However, Standard Life warned that drawdown strategies carry more risk because pension income depends on investment performance and withdrawal levels.

The company said previous analysis showed a £100,000 pension pot could last for life if withdrawals stayed at £4,000 annually and investment growth remained above 5%. But the same pot could run out in as little as 13 years if withdrawals were higher and investment returns were weaker.

Please don’t let this happen to you.

Trust Intelligence from Kepler Partners

Fund Profile HHI

08 May 2026

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Henderson High Income (HHI). The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview Analyst’s

HHI has hit its 13th consecutive year of dividend growth.

Overview

Henderson High Income (HHI) continues to differentiate itself within the UK equity income space through its blended approach, combining equities with a meaningful allocation to bonds. This structure supports a higher and more diversified income stream, whilst also introducing an element of defensiveness relative to more traditional equity-only strategies.

The Portfolio is focussed on financially robust companies capable of delivering sustainable and growing income, complemented by a bond allocation targeting higher-quality issuers. Recent activity reflects this approach, with additions to the bond portfolio including large, well-capitalised financial institutions such as AXA, ING Group and NatWest Group, alongside new equity positions in Bodycote and selected REITs such as Big Yellow Group.

This approach is also reflected in the trust’s Dividend profile. HHI currently offers a yield of 5.6%, a premium to both the broader UK market and peer group, alongside a 13-year track record of consecutive dividend growth, achieved at an annualised rate of 2.1%. Income is also well diversified, with less reliance on a small number of large-cap payers than the wider market. This is complemented by the use of cheap long-term Gearing, agreed in the past at very attractive rates, which supports income through positive carry and helps fund the bond allocation, whilst also contributing to a more stable overall return profile.

Performance has been resilient over the longer term. Over five years, HHI has outperformed its composite benchmark, reflecting the benefits of its dual equity and bond allocation. Over the past 12 months, returns have been solid in absolute terms, although relative performance has lagged the strong and concentrated rally in UK equities, alongside the moderating impact of the bond allocation. At the time of writing, the trust trades on a 4.2% Discount, in line with its five-year average.

Analyst’s View

We think the case for UK equities is finely balanced. Valuations remain undemanding relative to global peers, and many companies continue to generate strong cash flows. However, the outlook for inflation and interest rates has become more uncertain. Whilst rates have eased from their peak, the recent rise in energy prices, driven by geopolitical tensions in the Middle East, has complicated the path forward. Markets had begun to price in rate cuts, but the risk of more persistent inflation means policy could remain tighter for longer, sustaining competition from alternative income vehicles.

In this environment, we think HHI’s approach holds up well. The combination of equities and a meaningful bond allocation provides both a higher starting yield and a more diversified income stream than the broader UK market, where dividends remain concentrated in a small number of large-cap names. The bond sleeve, funded in part through gearing, is particularly notable. It supports the trust’s premium yield and, with borrowing costs below portfolio yields, creates a positive carry whilst helping dampen volatility. At the same time, the equity portfolio retains exposure to areas where valuations appear more compelling, including UK mid-caps, without an overreliance on energy or other highly cyclical sectors facing heightened uncertainty.

There are, of course, trade-offs. The bond allocation may limit upside in strongly rising equity markets, whilst a higher-for-longer rate environment could renew competition from lower-risk, high-income-generating alternatives. However, in our view, HHI’s combination of one of the higher yields in the sector, diversified income across equities and bonds, and a more defensive profile leaves it potentially well placed to navigate a more uncertain backdrop whilst still offering capital growth potential.

Bull

• Differentiated investment process combines equities and bonds to deliver a high, sustainable and growing income, alongside capital growth
• Merger with HDIV has increased liquidity and enhanced asset base, lowering costs and broadening appeal
• Unique approach to gearing helps boost income and capital growth, alongside reducing volatility in the portfolio

Bear

• Allocation to bonds may see the trust struggle to keep pace with a strongly rising market, relative to a pure equity strategy
• Tilt to mid-cap companies may bring more sensitivity to state of the UK economy
• Whilst the approach to gearing helps dampen some volatility through bond exposure, it will still magnify losses in down markets

Trust Intelligence from Kepler Partners

No country for old energy

As the energy mix evolves, renewables look increasingly attractive, despite market scepticism.

Kepler Trust Intelligence

Disclaimer

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.

We’re back!

Following on from our trip to Europe earlier this year, Alan and I return once more, armed with a format that has struck a chord with our readers. Less formal and more conversational than our usual style, but an effective way of genuinely getting to grips with a topic. At its core, it’s simple: one person knows a subject matter inside out, and the other takes advantage of that knowledge by asking the questions investors actually want answered. Not just the complex ones, but also the seemingly obvious ones, the kind you think you understand until you try to explain them properly.

In investing, it is very easy to get lost in the detail, whether through the terminology, ever-evolving themes or the sheer volume of information available to us. Over time, that can cloud understanding. But we think this format helps combat this. It allows us to strip things back, peel away the layers and help connect the moving parts to build a clearer, and perhaps more complete picture.

This time round, we are turning our attention to the world of renewables, a sector that has grown rapidly but one that has become increasingly complex and, at times, difficult to navigate for those not immersed on a day-to-day basis. As with our trip to Europe, Alan takes the role of the tour guide, and I play the curious tourist, asking the obvious, the overlooked and, occasionally, the uncomfortable questions. The aim is to cut through any confusing narrative and truly understand how the asset class and sector tick.

Josef Licsauer

How do renewable energy trusts make their money?

Alan Ray

At a very basic level, renewables trusts make money by selling electricity, but importantly, in most cases, this is not at the prevailing spot price, which can be volatile. More often than not, renewables trusts have quite a lot of certainty over the price they will receive for several years. This is where things very quickly become jargon- and acronym-heavy, but the fundamental concepts are straightforward enough. One of the other potentially confusing things is that the system in the UK and Europe has evolved over time, with various legacy systems still in play. But the UK’s current system is gradually being adopted, with local variations, across Europe.

The way that renewables trusts get a fixed price is based on a contract for difference (CfD). Here, a ‘strike price’ for the price of electricity is set. If the electricity market’s wholesale price rises above that strike price, the renewables trust pays the difference over to, in effect, the UK government. If the wholesale price falls below that level, the reverse happens. Thus, the renewables trust either gives up excess profit over its agreed strike price or is compensated if the market falls below it. When you read about the UK’s auctions for renewable energy projects, what’s happening is an auction to set the strike price for how much a project can charge. This is attractive for investors as it gives a high level of predictability over revenues, and by extension, dividends.

An important nuance is that this system is designed to encourage new projects, and the auction referred to above is to set the price before a project is built. Signing an initial 15-year contract with a fixed price of electricity gives a developer enough certainty to finance and build a new renewables project.

When these contracts expire, the assets can become ‘merchant’, meaning they are free to sell power at the prevailing price. But very often, renewables trusts will look to sign a power purchase agreement (PPA) with a corporate buyer of electricity. These contracts are conceptually very similar to a CfD and once again secure a more predictable income stream that matches the goal of paying a high and predictable dividend. The way these work is that the renewables trust sells its power to the grid at the wholesale price, and then the corporate buys electricity from the same grid at that price. A PPA will be structured with a strike price, and the differences between the strike price and the wholesale price paid between the two will effectively create the same fixed price that a CfD creates. As you can imagine, large corporates are keen to have long-term certainty over the price of electricity they consume, so these contracts are common between renewables trusts and well-known corporates in the UK and elsewhere. Contract terms can vary depending on specific needs, but the basic concept is usually the same. Finally, you will often see renewables trusts referring to inflation links, as strike prices in both government and corporate contracts can be adjusted for inflation over the life of the contract.

There are some other aspects of the system that are gradually becoming more pertinent. Energy storage, usually using large batteries, is an important enabling technology, and it is likely we will see more of this owned by renewables trusts. These assets also come with a lot of jargon, but essentially have a more ‘merchant’ business model, without the same fixed prices described above. Batteries store power when it’s not being consumed and release it when demand rises, making profits from the difference between the live electricity price, which fluctuates according to demand throughout the day. This means profits are related to price volatility more than absolute price, providing a revenue stream with different characteristics.

There are a couple of specialist battery storage funds, with Gresham House Energy Storage (GRID) being the one I know quite well, as in another role I helped with its IPO, and you can see from the price performance that battery revenues on their own are more variable. The big, diversified renewables trusts have taken a careful approach to adding this technology, but as it has become more accepted and part of the mix, you are seeing trusts like The Renewables Infrastructure Group (TRIG) add a small proportion of battery storage into the portfolio.

Energy storage isn’t a new thing on the UK’s grid. Readers may have heard of the Dinorwig ‘electric mountain’ in North Wales, the most well-known of the UK’s pumped storage facilities, which opened in 1984. Here, water is pumped from a lake at the foot of the mountain up to a chamber inside the mountain during times of excess power on the grid, then later released back through turbines when the grid needs it. Batteries are just another form of this and help to stabilise the greater variability of output, or ‘intermittency’ of renewable energy, compared to more traditional forms of power generation. It also highlights that although the technology changes, some things don’t: whether it is coal, gas, wind or nuclear, electricity demand does not always neatly match when it is generated.

So overall, the system encourages enough predictability to stimulate new asset development but also allows more mature assets to secure predictable cash flows. This is why, despite share price volatility in recent years, the main renewables trusts have had very predictable dividends.

JL: I’ve heard that investments in renewables are often structured in clever ways. Can you expand on that?

AR: Yes, this knowledge is often assumed in, for example, annual reports, so it’s worth spending a couple of minutes thinking about this. Assets are usually held within individual companies that the trust itself is the sole shareholder in, and you will very likely see a list of these somewhere at the back of a renewable trust’s annual report. You might see these referred to as SPVs, or special purpose vehicles, but they are basically just a company with the sole purpose of owning an asset. Often, they borrow, or gear, which is something we are all familiar with from conventional investment trusts. But in renewables and infrastructure generally, it’s very common to borrow one step removed.

This has some advantages. The first is that, as we discussed above, assets have a life and so borrowings can be matched to that, amortising over the life, rather like a capital repayment mortgage. Second, and this is usually hypothetical, debt held this way has no recourse to any other assets the investment trust owns, so if things go awry, the lender cannot impose any restriction on the trust, only on the specific asset. Third, it’s usually more tax efficient to own assets this way. While investment trusts don’t usually pay much tax, owning infrastructure assets can be more ‘leaky’ and structuring this way brings them back to a similar position to more conventional investment trusts, where little or no tax is paid on revenues and capital gains inside the trust. Unfortunately, just like any other investment trust, we shareholders will still have to pay tax on dividends and capital gains, unless we own them through an ISA or SIPP.

JL: What are the key risks investors should be aware of before allocating to the sector?

AR: Well, of course, the last few years have shown that the renewables trusts are ‘interest rate sensitive’, and I mean this in two ways. The first is the most obvious: if interest rates are higher, then borrowing costs can also rise, which can impact returns on what is, as discussed above, a geared asset class. But probably the greater impact has come from the reaction in share price terms. Before interest rate rises in 2022, many of the largest shareholders owned renewables trusts for their yield, as an alternative to government bonds, which yielded almost nothing. When it became possible to buy government or investment-grade bonds at much higher interest rates, there was a switch out of more risky yield assets, and renewables were one of the sectors impacted.

This is why we often show their dividend yields as a ‘spread’ over the UK’s ten-year government bond. Although it’s not a perfect comparison, it has had a very big effect on investor behaviour. So, investors need to be aware that rate rises are very likely a negative for share prices, but the opposite is also likely to be true.

I have found over the years that some investors can get a bit fixated on new technology that will supplant what we have today, and it’s often said, ‘we should just build more nuclear power stations.’ I actually think that’s right, as a diversified power mix is really the best solution, but it’s worth bringing this back to the commercial realities. The UK’s newest nuclear power station, still under construction, has a 35-year power price agreement. The price was set based on 2012 prices, which was when the deal to construct it was originally in discussion, and has risen in line with inflation since, currently about £130 per MWh, before the plant has even started generating electricity. This is expected to start in 2030, at which point a 35-year inflation-linked power price contract kicks in.

In contrast, recent UK renewables auctions have seen solar achieve a strike price of about £62 per MWh, onshore wind £72 per Mwh and offshore wind £91per MWh, with contracts that run for 15-20 years. Again, these are also inflation linked, but they highlight just how expensive nuclear power is. It has clear advantages, not least that it’s ‘always on’, but it also presents enormous, and expensive, technical challenges to get it up and running. As we discussed earlier, the differences in strike prices reflect the varying risk and complexity across technologies, with offshore wind requiring a higher return, but still well below nuclear.

Elsewhere, I mention how a diversified strategy can make sense, but those higher strike prices for wind highlight that there are great opportunities to be a bit more focused. One of the largest players in the sector, Greencoat UK Wind (UKW), is a great way to access a mix of offshore and onshore wind assets in the UK. This is appealing as, although offshore sits a bit higher up the risk curve, the rewards are also quite high, and potentially double-digit, which, for a long-term, predictable cashflow model, is really very attractive.

So, while we can’t just dismiss technology risk, the economics of the most obvious competitor are very different, and the timelines to become operational are long. There is a big effort behind smaller nuclear power stations that will be faster and cheaper to build, but these are far from being operational. While the theory of having many, more widely dispersed small nuclear power stations is great, and even more enticing because the UK’s Rolls-Royce is a bit of an expert in this field, I can’t help wondering what happens when the planning application to build one near my or your town goes in!

This brings us to policy risk. There is no doubt that pro-renewables policies in the UK and elsewhere are coming under pressure. We’ve seen a second energy price shock in just a few years, and any extra costs included in consumers’ bills are obvious targets for political discussion. It’s hard to say what a change of government might mean, but we do know that renewables are very often the largest source of electricity on the grid in the UK, and it would be difficult for any government to walk back from that once they are faced with the reality of government rather than the luxury of opposition. But again, we shouldn’t just dismiss this, and we need to keep a careful eye on it.

The last thing I’d highlight is that there is a shift in the sector to taking on more development and construction risk. First, it can generate higher returns, often double-digit, with an attractive balance between risk and reward. Second, renewables trusts have evolved from simply buying operational assets by issuing shares into more fully-fledged power-generating companies. With wide discounts to net asset value, raising new capital through share issuance is more challenging, but the trusts have grown beyond their initial remit and have the skills and experience to build new assets.

This will be a gradual process, as trusts are keen not to put their dividend cover under pressure. Allocating capital to construction means that, initially anyway, there is no yield on that capital, so we are seeing incremental increases rather than dramatic shifts, as the renewables carefully model how much capital they can use for construction without impacting on dividends. Ultimately, this will lead to a more self-sustaining business, and while it moves things up the risk curve a little, I think the balance of higher reward will be worth it.

JL: How does investing in renewables compare to more traditional infrastructure or utility investments?

AR: It’s no coincidence that the AIC sector name is ‘Renewable Energy Infrastructure’ as it shares many characteristics. We already looked at how investments are structured, and this is very much the way that traditional infrastructure is done as well. We’ve talked about how renewables trusts get paid, and while this is different to broader infrastructure, at a higher level, it shares the same basic characteristics of predictable long-term cash flows. In infrastructure, you will see investments that are ‘availability’ based as well as ‘demand based’, and the renewables definitely fall into the ‘demand based’ in that they do have to generate electricity to get paid! So, you can view renewables as a specialist subset of infrastructure.

JL: How do you value a renewables asset?

AR: As the saying in financial analysis circles goes, valuation is an art as much as a science, and the same is true in renewables. NAVs are calculated using very standard techniques and forecasts, but the very fact that forecasts are among the inputs means that NAVs can be viewed as being slightly ‘plus or minus’. While I know that many people like the accuracy implied by a NAV to one or two decimal places, it’s probably better as an investor not to look too hard at the numbers to the right of the decimal point, and to treat the first number to the left as indicative.

Overall, though, I think they veer more towards the scientific than the art. When you hear an equity fund manager talking about valuing the cash flows of a ‘real’ company, what they are doing is, conceptually at least, the same thing that renewables trusts do to calculate their NAVs. In the very simplest terms, this involves lining up all the predicted cash flows over as many years as can be sensibly forecasted, and then these are discounted back to give a ‘present value’. This discounted cash flow, or DCF, method isn’t the only way to value a company, but it is one of the well-established techniques. When you see a renewables trust referring to the ‘discount rate’, this is not the discount to NAV that we investment trust folk usually mean, but the rate at which future cash flows are discounted back to the present. A higher discount rate indicates that future cash flows are regarded as less probable, or more risky, but also means that potential returns are higher. So, as discount rates across renewables have trended slightly higher in recent years, we can say that there is a little more caution built into valuations. But therein lies the opportunity!

So, what are the main inputs? Renewables trusts often refer to power price forecasts or the power price curve. These are third-party forecasts that give expected power prices many decades into the future. As we saw earlier, quite a lot of revenues in the renewables trusts are fixed, but not all, and usually asset lives extend far beyond the period that revenues are currently fixed. This means a future forecast of power is an important input. Different renewables trusts will have slightly different approaches, but generally they all take independent forecasts from the same group of specialist firms, and sometimes may take the average of more than one forecast. So, yes, there can be some variation, but essentially the renewables trusts are all valued using similar power price forecasts.

More general inputs will be assumptions about long-term interest rates and inflation, and these are usually third-party consensus forecasts. You are unlikely to find much difference between the various renewables trusts.

One very obvious thing about all the renewables technologies we discussed earlier is that they are weather dependent. In fact, there’s quite a good inverse correlation between sunshine and wind, which is why, as an overall national strategy, it’s good to have some of both, as they tend to perform best at different times. One of the most important pieces of analysis that goes to valuing assets is the range of output they achieve, based on probability. In the industry, there are three standard scenarios, referred to as P50, P10 and P90.

P50 is the base case, with a 50% likelihood of happening, whereas P10 is the optimistic case, with a 10% probability, and P90 is the low case, with a very likely 90% probability. Weather is obviously an incredibly important part of modelling this, but other factors like the technical performance of the equipment over time and the maintenance required will also be factored in. Renewables trusts’ NAVs will be calculated on the P50 scenario, but when you read the annual report for a renewables trust, you will usually come across a sensitivity analysis that shows how much variation the NAV will experience for a given movement in any of the above inputs, including the difference variation between P10 and P90. This is incredibly useful as it means investors who have their own views about inflation, interest rates, or power prices can form their own opinion. This means that renewables trusts are, once one gets used to all the technical language, actually rather transparent.

That variability of weather and the different times of the day or year that different technologies work best is why some renewables trusts take a diversified approach, owning a range of different wind and solar assets in different locations or even countries. Two of the best examples are TRIG and Octopus Renewables Infrastructure (ORIT), which both own assets in different European countries, with the UK as the largest single country. TRIG is so large that even though it is diversified across many assets, it has a stake in the UK’s giant Hornsea One offshore wind array, which generates enough to power over a million homes. ORIT’s manager will be very familiar to readers as it is part of the group that includes one of the largest domestic energy companies in the UK, and ORIT benefits from all the expertise that comes from a much larger group with huge experience of developing and operating assets in the UK and elsewhere.

JL: Renewables had a difficult couple of years. Was that a structural issue, or more about the environment they were operating in?

AR: Earlier, we looked at how interest rates have had a huge impact on share prices. It’s notable through that period that dividends have not been cut, and while, yes, NAVs have fallen, it’s not to anything like the same extent as share prices. One thing to keep in mind is that performance tables used across the industry are ‘total return’, and a key element of total return is that dividends are reinvested. Total return gives us an ‘apples with apples’ comparison of performance across different types of funds in different sectors, so perhaps we could say it is, like democracy, the least worst of all the various systems. But very often, investors in high-yielding investment trusts are not reinvesting the dividends, so their actual performance experience will be different.

That’s not to diminish the frustration felt from a falling share price, but reinvesting in a falling share price is obviously going to magnify the loss, and many, perhaps most, investors won’t have done that. Interestingly, we are seeing some of the value specialists, such as MIGO Opportunities (MIGO), picking up shares in the renewables trusts in recognition of the value on offer.

Everyone has to decide for themselves if they can live with a share price that might be more volatile than the underlying NAV, but one of the key things to think about is dividend cover and how sustainable it is. If a renewables trust can keep paying, and growing its dividend, then with yields often above 10% at the time we are writing this, the old phrase ‘being paid to wait’ really comes into play.

JL: ESG as a topic has fallen by the wayside in recent years. From the initial spurt of green washing and labelling ESG for the sake of it, anything ESG has performed poorly. Where are we now, and do renewables fall into this camp, given the E of ESG? Or, are these investments really as green as they’re often marketed?

AR: This is a big topic, and yes, the climate has changed rapidly, no pun intended. But stepping away from renewables for a moment, one thing I think is worth thinking about is how ESG investing is evolving to accommodate the defence industry. It’s not true to say every ‘ESG’ equity fund is now open to defence stocks, but there has certainly been an evolution of exclusion policies. Turning that logic around and applying it to renewables, even if, as an investor, one doesn’t care at all about net zero, energy security is arguably part of a holistic defence strategy. So, I think it is possible for investors of all kinds to find some common ground. And as we looked at earlier, renewables assets are commercially viable, so you don’t have to be an ESG investor to find a reason to invest.

Also, I’d note that, unlike other ESG scores, which involve quite a lot of subjectivity, renewables trusts’ main impact is measurable and is usually in the first one or two lines of any trading update, i.e. how much electricity has been generated.

AR: Final thoughts

I’m going to leave the closing to Joe, but I’d conclude with one thought, which is here we are again in another unfolding energy crisis that exposes how vulnerable the UK is to fossil fuel prices, and at the same time, the big renewables infrastructure trusts are trading at the widest spreads compared to UK government bonds that they have ever done. I know that UK government bond yields might go up, I know that the renewables trusts don’t immediately profit from spikes in electricity prices, and I know the political climate is a bit tricky, but I just find this to be such a strange anomaly, and I think in the fullness of time others will see the same thing.

JL: Final thoughts

What struck me most from this discussion with Alan is that renewables are both more complicated and more straightforward than they first appear. The jargon can be off-putting, from PPAs to P50 assumptions and discount rates, but the core idea is relatively simple: these are long-life, income-producing assets selling something the world needs more of, not less.

That does not make the sector risk-free, far from it. Interest rates, politics, power prices, weather and construction risk influence the asset class, and we should not ignore them. But equally, it feels too narrow to judge the sector purely through the lens of recent share price weakness, or to dismiss it as yesterday’s ESG trade. These assets are already embedded in the energy system. In the UK, renewables now account for more than half of electricity generation, which makes the sector look far more like core infrastructure than a niche allocation.

What has changed, perhaps, is the narrative. The case for renewables is no longer just about decarbonisation, but something more pragmatic: energy security, affordability and meeting rising electricity demand as economies continue to electrify. For me, that is the key takeaway. Renewables sit at the intersection of infrastructure, income and long-term demand for electricity and power. To me, that feels increasingly relevant, particularly in today’s environment.

Renewables Infrastructure Group promises £300m more disposals and fee cut ahead of AGM continuation vote

• 11 May 2026
• QuotedData
• Gavin Lumsden

The Renewables Infrastructure Group (TRIG) has sought to shore up shareholder support for its continuation vote next month with the £1.6bn InfraRed Capital fund saying it will target £400m of asset disposals in the next 12 months, an increase of £300m, in order to prioritise share buybacks to tackle its 34% share price discount and repay £240m of borrowing.

No new third party investments will be made and, if the continuation vote on 30 June passes, management fees will from July be based on market value not net asset value. Added to fee cuts made last year, this will save the investment company around £8m a year, a 28% reduction in costs, chair Richard Morse was preparing to tell investors at a capital market seminar this afternoon.

He said the company was already in exclusive talks regarding the sale at “an acceptable price” of a UK offshore wind asset to an experienced international infrastructure investor, which was doing due diligence. Analysts at Winterflood believed this was TRIG’s £160m stake in the Beatrice wind farm off the coast of Scotland.

“Disposals will be targeted to preserve the portfolio composition required to deliver the medium-term growth opportunity,” said Morse.

“Whilst we maintain a high conviction in TRIG’s investment case, it is clear that we must go further in our actions to manage the company’s persistent share price discount,” Morse announced before the investor meeting.

TRIG has been in the spotlight since a rebellion by shareholders in InfraRed stablemate HICL Infrastructure (HICL) scuppered a proposed merger with TRIG made last November. At the time investors such as CG Asset Management commented on TRIG’s vulnerability to falling power price forecasts and government policy changes.

Earlier this month TRIG reported the portfolio had stabilised in the first quarter with NAV per share adding 0.1p to 104.1p after falling 10.3% last year. Nevertheless, from a peak of 134.6p at the end of 2022, NAV per share has fallen 27.5%. Even with dividends included, the shares have fallen 31% over three years but have returned a total of 28% over a decade.

Despite the high 11% yield on the lowly-valued shares, TRIG is confident it can sustain a progressive dividend covered 1.1 to 1.2 times by earnings. It says a combination of disposals and investments in existing assets with buybacks can generate around 4% annual growth in distributable cash flow per share in the five years to 2030.

Morse said the board considered serving notice on InfraRed and becoming a self-managed fund or appointing a new external manager. However, consultation with shareholders showed a majority supported retaining InfraRed as the “best management team to deliver the board’s further discount management initiatives and support TRIG’s medium-term growth opportunity”. 

Our view

Matthew Read, senior analyst at QuotedData, said: “TRIG’s announcement represents a sensible and pragmatic response to the current environment. Recent sales processes across the listed renewables sector have shown that, despite the strong long-term case for these assets, now is not an especially attractive point in the cycle for large-scale disposals. Against that backdrop, TRIG’s strategy of selectively recycling capital over time, rather than pursuing wholesale asset sales, appears well judged.

“The proposed use of proceeds also makes good strategic sense. Share buybacks at current discount levels are highly NAV accretive, while reducing RCF borrowings should strengthen the balance sheet and improve financial flexibility. Retaining the ability to invest selectively into proprietary internal opportunities where returns exceed those available from buybacks also reflects a disciplined approach to capital allocation.

“The dividend is a key attraction for TRIG shareholders and so we are pleased to see both the further reduction in management fees which will help support the dividend, along with the focus on delivering a sustainable, well-covered dividend.”

Thursday 14 May

abrdn European Logistics Income PLC ex-dividend date
Alternative Income REIT PLC ex-dividend date
BlackRock American Income Trust PLC ex-dividend date
EJF Investments Ltd ex-dividend date
Fidelity Special Values PLC ex-dividend date
Greencoat UK Wind PLC ex-dividend date
Majedie Investments PLC ex-dividend date
NextEnergy Solar Fund Ltd ex-dividend date
Octopus Renewables Infrastructure Trust PLC ex-dividend date
Partners Group Private Equity Ltd ex-dividend date
Pershing Square Holdings Ltd ex-dividend date
Target Healthcare REIT PLC ex-dividend date

With an estimated discount ceiling of 15–20%, there’s still room for discounts to tighten if NAV performance improves this year, potentially driving strong total returns when paired with dividend yields of around 10%.

Investor’s Daily
Nickolai Hubble | May 10, 2026

Are you ready to play stock market ‘catch’?

Because it seems everyone’s got the knives out for stocks right now…

Get Back In The Box Miss Sharp

Even the deputy governor at the Bank of England is sounding the alarm bells:

Sarah Breeden says the US-Iran war has created “the worst energy shock in my living memory…”

Private credit is showing cracks…

Government debt is ballooning…

And equity valuations, she says, are “stretched” in ways that “rhyme with the vulnerabilities” that preceded the 2008 financial crisis:

“There’s a lot of risk out there… there will be an adjustment…”

And she is just the latest in a long line of investment veterans who believe the market is firmly in the “playing with fire” realm…

With permabear Jeremy Grantham – the 87-year-old British-born billionaire investor and philanthropist – declaring:

“We’re in the biggest stock market bubble ever”.

And warning the inevitable correction could be as grim as the Great Depression.

So, what to do?

When the stocks start falling, do you try to catch the ‘falling knives’?

Most standard investment advice is DON’T!

But Howard Stanley, the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide, says DO!

In his view, that’s how you get bargains!

The higher this market rises, the greater the fall will likely be.

The SNOWBALL knows what shares it would like to buy if/when the market falls, one problem is there are too many in the coveted list and it would also have to sell first to buy.

Without hindsight, you can only sell at the top and buy at the bottom by luck, so don’t beat yourself up when you don’t. You can buy the yield because as prices fall the yield rises.

Renew Infra Grp Ld – Strategy/Company/ Operations UpdateDate/Time:11/05/2026 07:00:31 ▼

This announcement has been determined to contain inside information for the purposes of the UK Market Abuse Regulation.

The Renewables Infrastructure Group Limited

·	Reaffirmed target dividend of 7.55p per share for 2026, progressive dividend policy and projected net dividend cover of between 1.1x and 1.2x on a sustainable basis.
·	Targeting £400 million to be realised principally from asset disposals and complemented by modest debt issuance over the next 12 months, comprising £100 million that completes the aggregate objective set out in 2025 and a further £300 million.
·	Proceeds to be deployed in line with the Board’s capital allocation policy, prioritising capital return to shareholders via share buybacks, reduced RCF borrowings and into higher returning proprietary internal opportunities. At the present share price, the Company is not pursuing any new third-party investments.

The Renewables Infrastructure Group Limited (“TRIG” or “the Company”) is a London-listed renewable energy investment company. TRIG creates shareholder value through a resilient dividend and long-term capital growth, underpinned by a diversified portfolio of renewable energy infrastructure that is actively managed by specialist investment and operations managers.

The Board and Managers, InfraRed Capital Partners and RES Group (together, the “Managers”), will provide today an update to shareholders at TRIG’s 2026 Capital Markets Seminar (“CMS“). Full details for the event are available at the end of this release.

Richard Morse, Chairman, TRIG, said: “The medium-term growth opportunity for TRIG is compelling for those shareholders looking to benefit from resilient income and capital growth, backed by visible cash flows from a high quality portfolio of wind, solar, and battery storage. Whilst we maintain a high conviction in TRIG’s investment case, it is clear that we must go further in our actions to manage the Company’s persistent share price discount.”

“TRIG intends to raise £400 million from asset disposals and optimising the portfolio’s structural gearing in the next 12 months to free up capital to support the Company’s investment case. The most advanced disposal processes are well in train. We intend to use proceeds to promptly complete the announced share buyback programme; reduce the Company’s RCF borrowings, and invest in internal, proprietary investments where they demonstrably exceed the net return hurdle implied by share buybacks.”

“The Board and Managers look forward to the Capital Markets Seminar at which we will update on TRIG’s strategy. The Board would like to thank TRIG’s shareholders for their continued support and engagement.”

Strategy Update

At today’s CMS, the Board will reiterate the high conviction it maintains in the Company’s medium-term growth opportunity underpinned by the UK and European governments’ desire for greater energy security, the resulting strength of the energy transition investment theme and TRIG’s proprietary internal investment pipeline. The Company’s geographically diversified portfolio of wind, solar, and battery storage assets provides measured, defensive exposure to the long-term, structural energy transition taking place across developed energy markets in Europe.

Electrification and energy security will continue to drive future electricity demand due to an active reduction in the use of fossil fuels, the increasing electrification of transport and heating, and the greater demand from data centres and AI.

TRIG has a conservative approach to leverage, with c. 90% of debt being fixed rate and repaid over the term of the portfolio’s fixed-price revenues, which underpins TRIG’s longevity through market cycles given its intentionally low interest rate risk and low refinancing risk.

The Board has every confidence TRIG can deliver compelling, risk-adjusted returns to those shareholders wishing to allocate capital to energy security and the ongoing transition and, in return, add resilient income and long-term capital growth to their portfolio.

To achieve this, the Company aims to:

·	Deliver a sustainable net dividend cover of between 1.1x and 1.2x;
·	Continue the Company’s progressive dividend policy to increase the dividend when the Board considers it prudent to do so, considering forecast cash flows, expected dividend cover, inflation across TRIG’s key markets, the outlook for electricity prices and the operational performance of the Company’s portfolio; and,
·	Generate a compound annualised growth rate in distributable cash flow per share of approximately 4 per cent in the five years to 2030 driven by active asset management, progressing internal investment opportunities within the existing portfolio, and share buybacks where they represent the best allocation of capital.

Further discount management

This medium-term growth opportunity notwithstanding, the persistence of the Company’s discount to net asset value (“NAV“) at which its shares have traded led the Board to carefully consider options to manage the discount and support a sustainable share price recovery such that TRIG can deliver its medium-term growth opportunity.

Following careful consideration of TRIG’s options, the Company is now intensifying its focus and resources to go further in its management of the share price discount and in turn strengthen TRIG’s investment case. The Board targets raising £400 million in the next 12 months principally from asset disposals and complemented by optimising structural gearing across the portfolio, comprising £100 million that completes the aggregate objective set out in 2025 and a further £300 million. The most advanced of these disposal processes is in relation to a UK offshore wind asset, where the Company is in exclusivity with an experienced international infrastructure investor, due diligence is materially progressed and an acceptable price has been agreed. Disposals will be targeted to preserve the portfolio composition required to deliver the medium-term growth opportunity.

Within the existing capital allocation policy, the Company will use the £400 million targeted proceeds together with retained cash in excess of the dividend paid to:

·	Complete the £150 million share buyback promptly of which £101 million has been completed between 9 August 2024 and 8 May 2026, leaving £49 million remaining as of today;
·	Reduce short-term, floating-rate borrowings under the Company’s RCF by repaying the c. £240 million drawn as at 31 March 2026, thereby providing greater balance sheet flexibility;
·	Invest £50 million in internal investments through further asset enhancements of the portfolio where such projects demonstrably exceed the net return hurdle implied by share buybacks on a risk-adjusted basis. Such internal investments include, inter alia, operational upgrades such as aerodynamic hardware for wind turbines, onshore wind repowering, greenfield batteries at proprietary sites, and co-location of batteries at existing generation assets; and,
·	Create surplus liquidity for accretive use with an estimated £75 million in cash available following repayment of the RCF, completion of the share buyback programme and funding of internal investments. Use of surplus liquidity will be determined by the Board as the proceeds of disposals are received and in line with the Board’s capital allocation priorities. At the prevailing share price this would likely be to extend the share buyback programme. New external investments, where the Company acquires third-party assets, are not being pursued at the prevailing share price discount to NAV.

Improved investment and operations management arrangements

Conditional on the passing of the continuation vote at the upcoming annual general meeting, effective 1 July 2026, investment and operations management fees will be based solely on market capitalisation. Under the new arrangements, the total fees paid to the Managers for Q1 2026 would have been £3.68 million, compared to the £4.53 million actually paid, representing a saving of £0.85 million (or £3.4 million on an annualised basis). This equates to a 19% reduction in fees, in addition to the reduction in management fees secured by the Board in 2025 amounting to c. £8m p.a. or 28%. The fee cap that applies to the existing arrangements will be retained. In addition to the 30.6 million shares in the Company already owned by the Managers, this change in fee basis further aligns the interests of the Managers with those of shareholders. The Board welcomes the change in fee basis agreed with the Managers, and the resulting saving for the Company when the shares are trading at a discount to NAV.

In reaching this agreement, the Board considered the Investment Management Arrangement (“IMA“) and Operations Management Arrangement (“OMA“) alongside the Company’s performance and shareholder feedback. The Board assessed whether the existing management structure – specifically the continued use of its current external managers – remained suitable for executing the proposed strategy. Following shareholder consultation, the Board identified a minority preference for in-housing management or the tendering of external management arrangements, while the majority of shareholders consulted remained supportive of the current management structure. After careful consideration of this feedback, receiving advice from its financial advisers and after conducting a detailed appraisal of various alternative approaches to management (including internalisation and/or a change in managers), the Board believes that the current managers represent the best management team to deliver the Board’s further discount management initiatives and support TRIG’s medium-term growth opportunity. 

Strategy Execution

For the Company to be effective in its discount management and for shareholders to benefit from the medium-term growth opportunity, the Board’s direction and Managers’ execution of its strategy must continue at pace.

The Company has a track record of delivering resilient income since IPO, with a total 25% growth in the dividend and average net dividend cover of 1.2x, after the systematic repayment of project-level debt.

Over the last year, the Board and Managers delivered:

·      Resilient cash flow generation: the portfolio’s distributable cash flow enabled the Company to:

o  achieve its dividend target of 7.55p per share for 2025 fully covered in cash;

o  repay £192 million of project level debt; and,

o  accelerate the pace of the share buyback programme with £101 million of the announced £150 million programme completed to date, delivering 1.2p per share of NAV accretion for shareholders.

·      Strong financial position: in early 2026, the Company raised £200 million of debt on favourable terms through a private placement. Following the private placement debt issuance, long-term structural gearing was 41% of look-through enterprise value, and c. 90% of TRIG’s debt is fixed rate and over the term of the portfolio’s fixed-price revenues.

·      Asset disposals: the Company is actively progressing asset disposals. As noted above, the most advanced of these disposal processes is in relation to a UK offshore wind asset.

·      Advancing development projects: construction of more than 200MW capacity is underway. Construction and development activities are an important component of the medium-term growth strategy supporting higher returns, progressing portfolio diversification and evolving the portfolio balance. These activities included:

o  78MW two-hour Ryton battery project, which is in the final stages of construction with grid energisation expected towards the end of Q2 2026;

o  25MW Cuxac onshore wind repowering project with energisation in H2 2026; and,

o  100MW two-hour Spennymoor battery project with energisation in 2027.

·      Active revenue management: the Managers have been active in securing new revenue price fixes. Of particular note was the 10‑year revenue contracts with Virgin Media O2, which improved the portfolio’s long‑term cash flow projections. This is in line with the Company’s strategy of enhancing revenue, cash flow and dividend visibility through active revenue management.

·      Operational enhancements: Following the rollout of various operational and technical enhancements across nearly 300MW of assets during 2025, investments with generation capacity of nearly 700MW will be upgraded in 2026.

Lindsell Train Investment Trust – “Market mispricing AI risk”

• 07 May 2026
• QuotedData
• QDprime

“Market mispricing AI risk”

During periods of global market uncertainty, the companies held by Lindsell Train Investment Trust (LTI) and its manager, Lindsell Train Limited (LTL), have tended to perform well as investors seek durable and resilient cash flows. Whilst some holdings – particularly those in the consumer staple sector – have proven defensive amid volatility linked to the Iran war, growing fears around the impact of artificial intelligence (AI) on software and data businesses has hit LTI and LTL hard.

This has been particularly acute at portfolio holding RELX. LTL argues that the market’s assessment is wrong. In sectors such as legal and financial, the cost of error is extremely high, and regulatory barriers make the datasets valuable and essential for the successful application of AI tools. Reflecting this, LTI used market weakness to initiate a position in US credit scoring giant FICO (which was already held in LTL’s Global strategy) in February.

Whilst funds under management at LTL have continued to fall, the company has launched a new $200m strategy focused on international equities, seeded by its substantial cash pile and a longstanding client.

Maximise returns over the long-term

LTI aims to maximise total returns over the long term, while preserving shareholders’ capital. It invests in a concentrated portfolio of global equities that it has identified as market-leading and that benefit from high returns on equity. It also invests in a range of Lindsell Train-managed funds and the unlisted security of its investment manager, Lindsell Train Limited.

Year ended	Share price total return (%)	NAV total return (%)	MSCI World Index TR (%)
30/04/2022	(11.5)	(4.2)	6.4
30/04/2023	(10.9)	10.1	3.1
30/04/2024	(19.5)	1.8	18.8
30/04/2025	10.7	12.2	5.1
30/04/2026	(23.6)	(17.7)	27.0

Source: Bloomberg, Marten & Co

Fund profile

Concentrated portfolio of 13 global equity stocks plus Lindsell Train funds

Lindsell Train Investment Trust (LTI) aims to deliver long-term total returns while preserving the real value of capital. It invests in a concentrated portfolio of 13 global “heritage” companies, alongside selected Lindsell Train funds and a stake in its manager, Lindsell Train Limited (LTL). The LTL management fee for LT managed funds and other funds that LTL manages are rebated back to LTI, so as to avoid double charging of fees.

As of March 2026, global equities made up 62.4% of NAV, with look-through exposure to 49 holdings. The trust is benchmarked against the MSCI World Index (in sterling) but is managed independently, with an active share close to 100%. LTI was launched in 2001 and is listed on the premium segment of the main market of the London Stock Exchange. LTI’s board of directors is the company’s AIFM and receives no remuneration for doing so.

Investment approach

LTL focuses on holding a small number of high-conviction, high-quality companies for the long term. It believes concentration can reduce risk more effectively than broad diversification. These businesses typically have durable competitive advantages and long histories (average age of LTI’s direct equity holdings of around 147 years).

Symbiotic relationship with LTL

LTI has a symbiotic relationship with LTL, helping seed new funds and benefitting from their growth. Its initial £66,000 investment in LTL grew significantly and stood at £28.2m (as at the end of March 2026), peaking at 48% of NAV in 2021 before declining to 19.8% by March 2026 due to weaker performance and reduced assets under management.

Market backdrop

War in Iran has heightened global geopolitical uncertainty

Global market uncertainty has heightened with the war in Iran intensifying geopolitical tension and upending a global economic recovery. Growth expectations have been lowered on the back of the energy price shock and re-accelerating inflation, with central banks being forced to shelve rate cutting plans as a higher-for-longer interest rate backdrop emerges.

At the same time, investors are also evaluating how artificial intelligence (AI) could reshape entire industries and sectors, distinguishing between likely beneficiaries and those at risk of disruption.

Markets have become highly event-driven and volatile, with concerns about inflation, oil prices, interest rates, and geopolitics all affecting sentiment. The impact of the uncertainty caused by both unstable geopolitics and the threat posed by AI has been great on LTI and LTL’s portfolios. We look at both here.

Geopolitical tension

Defensive stocks back in focus

The war in Iran and wider instability in the Middle East has brought defensive stocks back into focus. While energy, defence/aerospace and selective commodity stocks have made substantial gains, other safe haven sectors, including banking, have also benefitted. LTL’s consumer staples exposure has likewise proven relatively resilient in recent months. Within LTI’s portfolio, beauty and personal care giant Unilever was up double-digits in the year before it was reported that it was selling its food business in March (which we detail on page 9). Meanwhile, snacks behemoth Mondelez and soft drinks manufacturer AG Barr were both up in the weeks following the outbreak of war.

All four boast long-term track records of durable and growing revenues and should continue to reliably compound for years and decades to come. In the last period of significant market volatility – at the start of 2025 when tariff uncertainty and the DeepSeek large language model (LLM) launched – LTI and LTL’s portfolio held up relatively well, while tech-dominated indices, including the S&P 500 and NASDAQ faltered. This is illustrated in Figure 1, which shows LTI’s NAV return relative to the MSCI World Index.

Figure 1: LTI NAV total return relative to the MSCI World Index¹

The benefits of its defensive positioning were not quite as pronounced in the aftermath of the start of the war in Iran this year, coming at a time when a number of LTL’s data businesses were caught up in the widespread software sell-off.

Software sell-off

Data businesses suffered large sell-off

Following the launch by Anthropic of industry specific plugins for Claude Cowork in January – targeting particular verticals such as legal and finance – a period of indiscriminate selling of data and digital platform businesses ensued. The concern is that cheap AI tools may soon commoditise data provision altogether or at least impact future growth prospects.

A number of LTI and LTL’s holdings were caught up in this, not least London Stock Exchange Group (LSEG) and RELX.

LTL believes that the market has misjudged both companies, underestimating the long-term value of the datasets on which the new AI models depend. In sectors such as legal, risk, financial, and medical, the cost of error is extremely high, while much of the underlying data is protected by clear physical and regulatory barriers, meaning a significant proportion remains entirely unavailable to large language models (LLMs). As a result, trusted, accurate, reference-grade data should remain valuable even as AI tools become more widely adopted.

Figure 2: RELX (GBP)

RELX, which provides services to the global scientific, legal and insurance industries, already offers similar AI-enabled workflow tools. LTL argues that, whilst new AI applications are being developed, the value is less likely to accrue to the models themselves but more to the owners of the datasets upon which they rely. Both RELX and LSEG possess clear data moats. RELX, for example, has amassed over 100 billion legal documents and grows this data daily – the vast majority of which contain proprietary content. This legal data is rarely more than 1%-2% of a law firm’s cost base, LTL estimates. However, it is critical to their function and does not seem an obvious target for cost savings.

LTL believes that investors have overly discounted the long-term earnings potential of these and other data businesses, creating a buying opportunity. As such, LTI has recently initiated a position in US credit-scoring giant FICO (which we detail on page 10).

Investment process

Investment universe of 150 companies

LTL operates within a small universe of potential investments, typically no more than 150 companies, due to its strict focus on heritage businesses with predictable earnings (supported by pricing power and/or intellectual property), low capital intensity and sustainably high returns on capital. As a result, LTI has maintained a highly concentrated portfolio since its launch in 2001, averaging around 15 holdings (currently 13).

Most qualifying companies tend to fall into a limited number of broad sectors:

• Consumer branded goods;
• Internet, media, software; and
• Financials and networks.

Bottom-up approach without reference to benchmark

The portfolio is constructed on a purely “bottom-up” basis, with no reference to benchmarks. Each potential investment undergoes a rigorous due diligence process (sometimes lasting several years) including meetings with management and detailed industry analysis.

Valuation is assessed using multiple methods. Whilst LTL does not rely on traditionally constructed discounted cash flow (DCF) models, its approach shares many of its core principles, particularly in focusing on the long-term sustainability of returns of a company. Companies identified as offering the best value are selected for inclusion in the portfolio.

ESG integration

Signatory of UN Principles for Responsible Investment

LTI’s manager is a signatory to the United Nations Principles for Responsible Investment, the UK Stewardship Code, and the Net Zero Asset Managers initiative. It actively engages with portfolio companies on ESG issues, including climate change, and measures portfolio-level carbon emissions, footprint (tCO₂e/$m invested), and intensity (tCO₂e/$m sales) to assess exposure to climate-related risks.

LTL believes that companies with strong ESG standards are likely to be more durable and deliver superior long-term returns. Accordingly, ESG analysis is embedded in the investment process and covers environmental factors (including climate change), social, governance (including remuneration and capital allocation), as well as cyber resilience, responsible data use, human rights, anti-corruption, and reputational risks.

ESG factors influence portfolio decisions

Where ESG factors are expected to materially affect long-term prospects, they are incorporated into valuation assumptions, particularly long-term growth rates, and influence portfolio decisions, including whether to initiate, hold, or exit positions.

Consistent with its philosophy, LTL avoids:

capital-intensive sectors such as energy, commodities, and mining, including companies involved in coal, oil, or gas extraction; and

industries considered socially harmful or exposed to regulatory or litigation risk, such as tobacco, gambling, and arms manufacturing.

Active engagement with company management on ESG and stewardship issues is a core part of the strategy. Whilst generally supportive of management, LTL will seek to influence decisions where it disagrees with company actions.

Investment policy and restrictions

LTI can invest globally across a broad range of financial assets, including equities (listed and unlisted), bonds, funds and cash, with no sector or geographic constraints. Individual holdings are limited to 15% of gross assets. It may also invest up to 25% in LTL-managed funds (subject to board approval) and may retain holdings in LTL to benefit from its long-term growth.

The company does not invest for control purposes and will not allocate more than 15% of gross assets to other closed-ended investment funds.

Exits

Low single-digit portfolio turnover rate

LTL maintains a low single-digit portfolio turnover rate, with LTI’s turnover even lower. Investments are typically held for the long term, reflecting its conviction in the value of owning high-quality businesses over extended periods.

Positions are reduced or exited only for compelling reasons, such as a share price exceeding intrinsic value, or erosion of competitive advantages.

Long-term holding avoids transaction fees

This long-term approach minimises transaction costs, which the manager views as a drag on capital, and requires patience and discipline to look beyond short-term market noise. Exit decisions may also be influenced by the availability of alternative opportunities with stronger upside potential, with the manager typically identifying two or three vetted candidates at any given time.

Asset allocation

Figure 3: Breakdown of LTI’s portfolio at 31 March 2026

Figure 4: LTI portfolio by location of underlying revenue at 30 Sept 2025¹

At 31 March 2026, more than 60% of LTI’s portfolio value was invested in global equities, with LTL making up almost 20%. Over a third of underlying portfolio revenue originated from the US (on a look-through basis including positions in LTL), while Europe accounted for a quarter of revenues and the UK just over a fifth.

Figure 5: LTI holdings at 31 March 2026

Stock/holding	Sector	As at 31/03/26 (%)	As at 30/09/25 (%)	Change (%)
Lindsell Train Limited (LTL)	Unlisted security	19.8	24.4	(4.6)
London Stock Exchange Group	Financials	14.4	11.3	3.1
Lindsell Train North American Equity Fund	LTL managed fund	13.5	12.2	1.3
Nintendo	Communication services	11.1	14.0	(2.9)
RELX	Industrials	6.4	7.4	(1.0)
A.G. Barr	Consumer staples	4.7	4.0	0.7
Unilever	Consumer staples	4.6	5.0	(0.4)
Diageo	Consumer staples	4.2	4.4	(0.2)
Thermo Fisher Scientific	Healthcare	3.2	2.5	0.7
Mondelez International	Consumer staples	3.0	3.3	(0.3)
Universal Music Group	Communication services	2.6	3.1	(0.5)
Heineken	Consumer staples	2.4	2.1	0.3
PayPal	Financials	2.2	2.6	(0.4)
Finsbury Growth & Income Trust Plc	Financials	2.1	2.1	0.0
Laurent-Perrier	Consumer staples	2.0	1.7	0.3
FICO	Financials	1.7	–	1.7
Cash & equivalent	–	2.1	0.2	1.9

Source: Lindsell Train Investment Trust, Marten & Co

We have covered many of LTI’s holdings in previous notes (links to which can be found on page 19). Here we cover some important events among portfolio companies, as well as update on LTL.

Universal Music Group (UMG)

Figure 6: UMG (EUR)

We explained LTL’s investment rationale for UMG, which it bought into at the end of 2023, in detail in our initiation note and the manager says that this has not changed. Its belief that the Euronext Amsterdam-listed company was vastly undervalued has been proven by a £48bn bid for the company by Pershing Square Capital Management. Announced earlier this month, the deal values UMG’s shares at €25 compared to its previous closing price of €17.05.

If it goes ahead, shareholders in UMG will receive €9.4bn in cash and 0.77 new UMG shares as part of the deal, which would see UMG merge with Pershing Square SPARC Holdings, the special purpose vehicle established four years ago to make a large acquisition, and list on the New York stock exchange. Under the transaction, 17% of UMG shares will be bought back and cancelled while preserving the company’s investment grade balance sheet, and a new dividend policy may also be adopted.

UMG’s shares have been depressed since listing in 2021, with concerns over French conglomerate Bolloré Group’s 18% stake, the postponement of UMG’s US listing, under-utilisation of its balance sheet, and the threat of AI deepfakes on music industry revenues weighing on performance.

The LTL team believes that that whilst AI can generate huge volumes of music-like content, it does not change the value of real, established, and in-demand catalogues. UMG’s ownership of major music rights, where it controls roughly a third of the world’s recorded music (ahead of the other two major players Sony and Warner), puts it in a strong position to push for better pricing from streaming platforms such as Spotify, it adds.

The payout model currently used by the platforms – based on a simple pro-rata share of listening – is expected to improve and evolve allowing for minimum payments or fixed-value arrangements tied to the worth of catalogues. This would give UMG leverage to force platforms to absorb higher content costs or raise their own subscription prices. Changes would likely take time to flow through because UMG needs to align terms across multiple streaming partners, the manager says, but the direction of travel is positive.

Unilever

Figure 7: Unilever (GBP)

FTSE 100 conglomerate Unilever has been a long-term holding for LTL and a consistent presence in LTI’s portfolio. Last month, the group announced it had reached a deal to sell its food business to spice maker McCormick, creating a $66bn company with $20bn of annual revenues.

As part of the cash-and-stock transaction, Unilever shareholders will own 65% of the combined group, with McCormick owning the remaining 35%. Unilever will also receive $15.7bn of cash from McCormick under the deal terms. It has been structured as a so-called Reverse Morris Trust, which allows the parent company (Unilever) to minimise its tax liabilities on the disposal if it retains a majority stake in the divested enterprise.

Unilever says that the deal, which is expected to complete by mid-2027 subject to McCormick shareholder approval, will transform the company from a multi-category conglomerate into a more focused, pureplay beauty and personal care company. The division accounts for a large portion of group revenues and is seen as faster-growing sectors.

Unilever has been pivoting away from food over the past decade to focus on beauty and wellbeing categories – last year spinning-off its Magnum ice cream holding into an independent entity.

Shareholders reacted negatively towards the McCormick deal, with its share price falling heavily since first being reported in March. LTI had reduced its position in Unilever earlier in the year, before the price weakened. The manager believes that the greater attraction of Unilever’s household and personal care portfolio has put selling pressure on the remains of Unilever’s food business. It thinks that it is this, rather than the merits of the deal, that has negatively impacted Unilever’s share price.

FICO

Figure 8: FICO (USD)

Partly funded by the exit of Unilever’s Magnum ice cream business noted above, LTI initiated a 2% holding in US-listed credit scoring giant FICO in February. It has been a constituent of LTL’s global equity portfolio since 2022, and the manager took advantage of share price weakness linked to the perceived threat from AI to add to its position.

FICO has two core businesses: the credit scores segment and the software arm. LTL notes that much of FICO’s growth has come from pricing power, with significant further room to raise prices after decades of undercharging. It believes that the scores business still has a large growth runway ahead of it, with opportunities to increase pricing and tweak its charging model, as well as capturing more of the value chain. Meanwhile, the software business’s shift to a new cloud-based platform has presented it with greater opportunities to cross-sell its risk and fraud prevention services.

LTL believes the AI disruption fears are misplaced in FICO’s case due to the sensitivity and protection given to the underlying bureau data and the regulatory burden around the scores themselves.

Diageo

Figure 9: Diageo (GBP)

A major recent development at drinks giant Diageo was the announcement of the halving of its dividend. New chief executive Dave Lewis said the company had taken the decision to reduce the pay-out in order to strengthen its balance sheet and drive long-term growth.

Lewis had been appointed earlier this year to turnaround the ailing company, which owns some of the best-selling premium spirit brands globally but has suffered a collapse in its share price since its peak in 2021. The dollar-based company declared an interim dividend of 20 cents per share in half-year results, down from 40.5 cents. Going forward, it said it would target paying 30-50% of earnings with a minimum annual dividend of 50 cents.

LTL says that it supports the dividend cut, providing it helps protect the balance sheet and avoids more damaging actions like selling valuable assets. Whilst acknowledging the disappointment, it believes that the core long-term strengths of the business remain intact: strong brands, durable market positions, and growth potential in markets such as India.

Diageo’s share price weakness has been exacerbated recently, with the company being uniquely hit by Trump’s tariffs, as a significant portion of its products are imported into the US from Mexico and Canada. Another concern for shareholders stems from the fact that people are drinking less. The manager says that the data points to a more nuanced story, however.

LTL

LTI’s performance is still largely determined by that of its largest exposure, LTL, which at the end of March 2026 accounted for 19.8% of the portfolio, down from 24.5% six months earlier. LTL has experienced substantial investor outflows in recent years. Funds under management (FUM) at LTL have fallen to £9.8bn in September 2025, from a peak of £24.3bn in July 2021. Annual management fees make up almost 99% of LTL’s total revenues and 80% of net profits are paid to shareholders in dividends, meaning that the contribution made by LTL to LTI’s revenues remains considerable.

One positive development amid declining FUM is the recent launch of a new international strategy (EAFE) focused on the developed world excluding the US, which complements LTL’s four existing strategies spanning global, UK, Japan and North American equities. LTL says that this strategy has been under consideration for some time, but current market valuations and growing demand for international equities made the timing particularly compelling.

Alongside the establishment of an International LLC (funded with balance sheet capital) a longstanding client also seeded the strategy through two segregated mandates. As a result, the strategy has launched with over $200m in AUM. The strategy will be co-managed by James Bullock and Ben van Leeuwen.

Performance

Direct comparisons with benchmarks and the global investment companies peer group are difficult to make due to LTI’s unique investment policy and the concentrated nature of its portfolio. Figure 10 shows that LTI’s NAV has fallen sharply over the past year relative to both its peer group and the MSCI World Index, as FUM at LTL has fallen further and sentiment towards its software holdings was hit by AI disruption fears.

Figure 10: LTI NAV total return performance relative to benchmark and peer group¹

Despite the poor performance over five years, LTI’s 10-year NAV total return is still greater than both the peer group and the benchmark, as shown in Figure 11, reflecting the exceptional contribution of LTL in prior years.

Figure 11: Cumulative total return performance over periods ending 30 April 2026

	6 months (%)	1 year (%)	3 years (%)	5 years (%)	10 years (%)
LTI share price	(14.6)	(23.6)	(31.9)	(46.3)	43.2
LTI NAV	(19.3)	(17.7)	(6.0)	(0.9)	262.2
MSCI World Index	3.3	27.0	58.6	73.9	254.9
Peer group average NAV	1.4	20.9	44.8	67.6	241.1

Source: Bloomberg, Marten & Co. Note 1) peer group is defined below.

Peer group analysis

Figure 12: Peer group comparative data as at 5 May 2026

	Premium / (discount) (%)	Dividend yield (%)	Ongoing charge (%)	Market cap (£m)
Lindsell Train	(15.6)	7.0	0.80	120
Alliance Witan	(5.5)	2.2	0.47	4,823
AVI Global Trust	(8.4)	1.8	0.85	1,024
Bankers	(7.7)	2.0	0.51	1,313
Brunner	(8.3)	1.7	0.61	644
F&C	(8.1)	1.3	0.45	6,115
Mid Wynd	(1.7)	1.1	0.64	211
Monks	(5.4)	0.0	0.43	2,447
Scottish Mortgage	3.5	0.3	0.31	15,568
Sector median	(6.5)	1.9	0.56	3,585
LTI rank	9/9	1/9	8/9	9/9

Source: QuotedData website

Up-to-date information on LTI and its peers is available on our website

LTI is a constituent of the AIC’s Global sector, which is currently comprises nine companies. LTI’s discount is the widest among the peer group, while its dividend yield is far higher than the peer group median due to its unique structure and revenue contribution from LTL. The ongoing charges ratio is at the top end of this peer group, reflecting its small market cap (the smallest in the peer group), although we would argue that none of these charges are particularly high.

Figure 13: Peer group cumulative NAV total return data as at 30 April 2026

	6 months	1 year	3 years	5 years	10 years
Lindsell Train	(19.3)	(17.7)	(6.0)	(0.9)	262.2
Alliance Witan	0.2	14.2	36.5	71.9	190.7
AVI Global Trust	1.4	13.1	40.7	88.6	205.1
Bankers	3.7	27.5	44.3	68.4	204.3
Brunner	5.1	22.0	42.5	98.0	214.5
F&C	3.6	24.9	55.8	94.4	242.2
Mid Wynd	(8.3)	1.4	8.3	24.3	143.4
Monks	0.2	29.3	52.2	49.1	254.3
Scottish Mortgage	5.2	35.2	78.3	46.3	474.0
Sector median	1.4	20.9	44.8	67.6	241.1
AGT rank	9/9	9/9	9/9	9/9	2/9

Source: Bloomberg, Marten & Co

Dividend

Figure 14: LTI dividend history

LTI’s dividend is largely funded by the revenue income it receives from LTL, which accounts for around 72% of LTI’s total revenue. With FUM at LTL continuing to decline, further pressure in LTI’s dividend has become inevitable. For 2025, the dividend was £42 per share, down 18.4% on 2024. Further declines in LTL’s FUM will impact LTI’s future dividend, unless the board decides to draw upon revenue reserves, which seems unlikely.

Premium/(discount)

Figure 15: LTI discount over five years

LTI’s discount has moved within a range of 10.4% to 24.7% and averaged 17.5% over the 12 months ended 30 April 2026. As of publishing, the company’s discount had narrowed to 15.6%.

As we have discussed, LTL’s quality-focused investing style has been out of favour for some time and has contributed to LTI’s wider discount, while the continued shrinking of FUM at LTL has also been a significant factor.

The board has indicated that it believes using share buybacks as a tool to reduce the discount would prove ineffective. To fund a buyback programme, the company would need to sell existing quoted investments, which would result in an increase in LTL’s percentage weighting within LTI’s portfolio and an increased expense ratio for remaining shareholders.

Fees and costs

Investment management fee of 0.6% of the lower of market cap or NAV

Under the terms of the investment management agreement, Lindsell Train Limited is entitled to receive an annual fee of 0.6%, calculated on the lower of adjusted market capitalisation or adjusted NAV. In the year to 31 March 2025, the manager was paid £819,000 (2024: £976,000).

The manager is also entitled to receive a performance fee, which is calculated annually at a rate of 10% of the value of any positive relative performance versus the benchmark in a financial year. Relative performance is measured by taking the lower of the NAV or average market price, taking into account dividends, at the end of each financial year and comparing the percentage annual change with the total return of the benchmark. A performance fee will only be paid out if the annual change is both above the benchmark and is a positive figure. No performance fee has been paid since 2021.

For the year ended 31 March 2025, LTI’s ongoing charges ratio was 0.80% (2024: 0.83%).

Capital structure

LTI has a simple capital structure with one class of ordinary share in issue. Its ordinary shares have a premium main market listing on the London Stock Exchange and, as at 5 May 2026, there were 20,000,000 in issues and none held in treasury.

Gearing

LTI is permitted to borrow up to a maximum of 50% of NAV, but it does not currently use gearing to enhance returns, in part reflecting the size and risk associated with the company’s unlisted investment in LTL.

Financial calendar

The trust’s year-end is 31 March. The annual results are usually released in June (interims in December) and its AGMs are usually held in September of each year. An annual dividend is usually paid in August.

Major shareholders

Figure 16: Major shareholders as at 5 May 2026

Management team

LTL is headed up by Michael Lindsell and Nick Train, who co-founded the business in 2000. The wider investment team comprises four members, all of whom are portfolio managers following recent promotions in March 2026.

Michael Lindsell

Michael co-founded LTL in 2000 and is the firm’s chief executive. He is the portfolio manager for Japanese equity portfolios and jointly manages global equity portfolios. Michael has over 40 years’ experience in investment management, including heading GT Management’s global and international funds. Following the acquisition of GT by Invesco in 1998, he was appointed head of the combined global product team. Michael has a degree in Zoology from the University of Bristol.

Nick Train

Nick co-founded LTL and is the firm’s chairman. He is the portfolio manager for UK equity portfolios and jointly manages global equity portfolios. Nick has over 40 years’ experience in investment management, including as head of global equities at M&G Investment Management. He previously he spent 17 years at GT Management. Nick has a degree in Modern History from the University of Oxford.

As is illustrated in Figure 17, all of LTI’s directors have personal investments in the trust, which we believe aligns directors’ interests with those of shareholders.

Figure 17: Directors

Director	Role	Date of appointment	Length of service (years)	Annual fee (£)	Shareholding1
Roger Lambert	Chair	23/09/2022	3.5	43,000	5,000
David MacLellan	Chair of the audit committee	30/08/2023	2.6	36,000	7,500
Nicholas Allan	Non-executive director	18/09/2018	7.5	29,000	15,000
Helena Vinnicombe	Senior independent director	23/09/2022	3.5	29,000	2,300
Sian Hansen	Non-executive director	04/06/2025	0.8	29,000	1,400
Michael Lindsell	Non-independent director	13/07/2006	19.7	–	1,333,884

Source: Lindsell Train Investment Trust. Notes: 1) Shareholdings as per most recent company announcements as at 5 May 2026.

ny announcements as at 5 May 2026.

SWOT analysis

Figure 18: SWOT analysis for LTI

Strengths	Weaknesses
Focused investment strategy targeting durable, cash-generative businesses	Extremely concentrated portfolio offers limited diversification
LTI’s differentiated investment approach offers a way of diversifying investors’ portfolios	LTI’s returns can deviate markedly from those of peers and global indices
Opportunities	Threats
Investment approach could return to favour, especially if volatility persists	Focused portfolio brings stock-specific risk
	AI commoditises data provision, negatively impacting LTI stocks

Source: Marten & Co

Bull vs. bear case

Figure 19: Bull vs. bear case for LTI

Aspect	Bull case	Bear case
Performance	Performance trend reverses and investment approach is widely recognised	Momentum-driven stocks continue to drive indices, to the detriment of LTI returns
Dividends	LTI’s dividend yield is by far the highest of the peer group	Dividend falls as revenue income it receives from LTL continues to dwindle
Outlook	Quality, growth investing comes back into favour	Elevated macroeconomic risks and uncertainty over impact of AI make the outlook hard to predict
Discount	LTI’s discount narrows as enduring quality of portfolio companies acknowledged	Underperformance of peers and indices over past five years creates further selling pressure

Source: Marten & Co